Pre-pack deal for Cath Kidston means UK stores to close
Fashion and homewares retailer Cath Kidston is being sold back to its Hong Kong-based owner via a pre-pack administration deal, in a move that will see all 60 UK stores close their doors.
Just 32 jobs will be saved under the rescue deal, while 908 staff will be made redundant, the company has announced.
Baring Private Equity Asia, which has been the owner of the retro retail brand since 2016, has agreed a deal with administrators at Alvarez & Marsal to buy the brand, e-commerce platform and wholesale operations.
This means that Baring can continue to manage the brand without taking on its existing liabilities to creditors and lease obligations.
Cath Kidston will continue to exist as an e-commerce and wholesale business, reported The Guardian.
Melinda Paraie, the chief executive of Cath Kidston, said: “While we are pleased that the future of Cath Kidston has been secured, this is obviously an extremely difficult day as we say goodbye to many colleagues.
“Despite our very best efforts, against the backdrop of Covid-19, we were unable to secure a solvent sale of the business which would have allowed us to avoid administration and carry on trading in our current form.”
Cath Kidston had been struggling financially for a while, with losses of more than £27 million in the last two financial years. The company made a further £11m loss before interest, tax, depreciation and amortisation in the nine months to December, according to Sky News.
The coronavirus pandemic put further pressure on the business, which was forced to close all stores in line with government guidelines.
Other fashion brands including Oasis, Warehouse, Laura Ashley and Debenhams have also recently called in administrators after struggling to cope with the global crisis.
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