Select administration filing is imminent
Select is likely to enter administration this Thursday and propose another company voluntary agreement (CVA) in a bid to save the business from collapse.
The loss-making UK clothing chain for 18-45 year old women has struggled to cope with rising competition from online rivals, falling consumer confidence and higher business costs.
Business advisory firm Quantuma has been appointed to oversee the administration, and will try to sell the company or attempt a major restructuring to prevent another retail chain from disappearing from the high street.
“The company will announce on Thursday that it will be going into administration,” said Quantuma partner Andrew Andronikou on Wednesday. “Then in another two or three weeks it will announce proposals to creditors for another CVA. There are no plans to close any stores or make redundancies.”
Owned by Turkish entrepreneur Cafer Mahiroğlu since 2008, the chain has 183 stores in the UK and employs over 2,000 people.
Several fashion companies including Arcadia and Debenhams have considered or implemented a CVA in the last year to renegotiate rents and close underperforming stores, but Select has been down that road before.
In 2018, it launched a CVA that allowed it to cut rents by up to 75% and save thousands of jobs, however it seems the deal was not enough to make the clothing label competitive.
Select’s mission to provide affordable catwalk-to-high-street styles has been made harder by the rise of cheap online fashion retailers such as Boohoo, PrettyLittleThing and Missguided, who target the millennial demographic with tongue-in-cheek marketing, faster delivery and a strong social media presence.
Select’s most recent accounts showed a £15.5m loss on sales of £117m in the 18 months to 2 December.
Copyright © 2023 FashionNetwork.com All rights reserved.