Who's Gone Bust in UK Retailing 2005-8?

June 2008

Legal Note: this listing of UK retailers who went into receivership between 2005 and 2008 is based on research carried out at the time and our understanding of their business affairs then. Some of these companies recovered and came out of administration; some were bought by other businesses; some were sold as going concerns but changed their name; for some, the name was bought and this is still used, but under different ownership; and others ceased to exist. The presence of any business in this historical listing must not be taken to imply that it no longer exists, its name is not used or that such business, if still trading, is impaired in anyway.

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2008

The predicted failures of several companies in 2008 have now occurred - certainly, with more to come. Three quick points. First, failure or administration is not something that occurs overnight: it is the result of months or years of poor trading, cash flow problems and failing to build up reserves. Secondly, there are rather too many instances of failure followed by immediate purchase by another investor. Thirdly, the impact of failure on the UK supply chain can be immense. The fall of Stead and Simpson has already caused the bankruptcy of at least one shoe manufacturer: the retailer was accepting deliveries until a few days before going into administration. Shopfitter organisations have also been having a terrible time over the past two years: JDS Group (350 employees and £30 m sales) is the most recent casualty.

• MK One, the value fashion retailer with 170 stores, was acquired by the turnround specialist Hilco from Bauger in April 2008. It was reported in The Telegraph that many of its invoices are unpaid and that many of the cheques sent to cover the Christmas period have been cancelled. Some form of administration seems imminent to enable this firm to 'start again'. Administration+resurrection is likely to involve only 80 or so stores.
• New Heights, the furniture chain started in 1999, ceased trading in May. It had 20 stores in locations such as Bath, Bristol, Cambridge, Reading and Nottingham. The owners bought Sofa Workshop (34 stores) in 2006, but their stores were unaffected by the news. Existing shareholders bought Sofa Workshop and five of the 'New Heights' stores which will be rebranded as Sofa Workshop.
• Sound Control Group, the largest UK musical-instrument retailer with 26 stores and sales of £60 million and 338 staff went into administration in May. It trades as Sound Control, Media Tools, Turnkey and Soho Sound House. Ten stores have already been closed with 163 employees made redundant.
• Ethel Austin, the Liverpool-based value fashion retailer with 2,800 staff and 300 stores, went into admin in mid-April. This retailer with around £150 million sales pa had been suffering for at least two years and for the last eight months has been very shaky indeed. Only a few days before, a refinancing deal for the business seemed in prospect. 33 stores closed immediately (265 jobs) and 180 head office jobs were also lost.
• Ossian Retail Group, owner of fashion group Internaçionale and the Au Naturale homeware outlets, went into admin in April as part of a deal by new investor Agilo to break it up. There are 120 outlets, likely to be purchased by Edinburgh Woollen Mill, Poundstretcher and Bon Marché. B&M Bargains has already bought 30 Ossian stores
• Farmers Hypermarket, parent company of 'Farmers' City Market', went into administration in April owing £831,000.
• FreshXpress, the grocery retailer that emerged from the ruins of KwikSave last year, has gone into administration. What a surprise.
• Toyzone Ltd, the operator of 20 toyshops in the South East, South West/Wales, Yorks/Humber and NI, went into administration in April but was rescued by J A Magson (toys/stationery distributor). It has 200 employees. Its parent company, Youngsters, which also acts as a buying group for independent toy retailers, also went into administration.
• Sleep Depot, 100 units, 71 of which are concessions Land of Leather, went into administration in April.
• Richleys Stewarts, the Swansea-based value clothing chain of 29 stores, collapsed in March. Administrators have sold 15 stores that will continue to trade (132 jobs) although 137 jobs will disappear in the remaining stores.
• Mexx, the US-owned fashion retailer, is to close all its 61 stores by July, costing 300 jobs. This only affects the UK operation (leaving 6000 employees in 64 other countries). Mexx is a subsidiary of Liz Claiborne, but failed to perform against Zara and H&M. Its UK factory outlets will remain.
• Select Retail, the 250-store value chain selling women's fashion and jewellery, went into administration in February but an immediate management buy-out saved one-half the stores and 1,000 jobs.
• Elvi, the plus-size ladies' fashion chain with 28 stores and 63 concessions in Debs and HoF etc, went into administration in early February, and most of it was rescued a week later by mystery buyers.
• Base Menswear, boy's and men's clothing, put its 18 stores into administration in February. It is hoped that some debt reform and structural change may preserve the 100-year old business.
• Sports Café, the operator of sports themed bars in the UK, went into administration in Feb and its sites in Manchester and Liverpool have been sold. The rest of the chain will be sold as a going concern.
• The Works, the much-loved remaindered bookseller trading as The Works, Book Depot, Banana Bookshop and Art Depot, went into administration in February 2008. The company had 300 stores (1600 staff) and suffered from poor trading, partly caused by supermarket bookselling. In May, a management buy-in via Endless costing £17-£25 million bought the company.
• Empire Stores, the oldest UK mail-order company, has been bought by Littlewoods, which took over its order book and current assets in January 2008, closing down all its operations, 850 workers losing their jobs.
• Stead and Simpson, owners of Shoe Express, Lilley & Skinner, and Peter Briggs, did a quick shuffle in Jan 2008 to survive - thanks to Shoe Zone. Stead and Simpson went into administration, Shoe Zone immediately took over 300 stores from the 375 chain and Clinkards took over 25, meaning that perhaps only 500 out of 3000 jobs have been lost. The 25 factory outlets trading as Famous Footwear had been sold off to H Jacobson, the famous novelist, author of Coming From Behind and that one about table tennis as well as owning Gola, Ravel, Lotus and Frank Wright.
• Dolcis, the high-street footwear retailer with 1,200 employees and 185 stores and concessions went into administration in January 2008, 600 staff losing their jobs and 89 stores being closed immediately. It was bought from Alexon in 2006, but over Christmas its major backer, Epic Private Equity, pulled out . In Feb 2008, the brand-name, stock and trading rights for 24 stores were bought by Stylo and 42 stores were put on the market for disposal.
• Card World, the 27 strong card chain, went into administration in January.

Who else has problems?

• Focus, Britain's third-largest DIY firm, was bought by Cerberus, the US hedge fund, for £1 in June. It had been in urgent debt-restructuring talks with creditors since the beginning of 2007 as its private-equity group owners decided to sell out. After several false dawns, Cerebus (the new owners) of the debt-heavy business agreed to pay off £174 m debts and pay the bondholders £40m (40%). Bill Grimsey and Bill Hoskins (known as 'the Bills'), the retail double act who revived DIY chain Wickes in the 1990s, became the new management team.
  
• Adams, the childrenswear retailers, needed new backers in Jan 2007 following poor trading and high debt. A number of its shops were closed and stock seized when it unilaterally revised rental agreements. In February the chain was bought for £20 million by John Shannon (former chairman of Country Casuals and Stead & Simpson).
• Budgens Stores,the 182-outlet grocery chain with 6000 staff, owned by Irish-based Musgrave, is to be sold off as individual shops to local entrepreneurs and community shops
• Faith Shoes, owned by private equity house Bridgepoint, is thought to have struggled with difficult trading
  
  

In Administration 2007

• Ponden Mill, the home furnishings chain with more than 135 stores, went into administration in December 2007 one month after being bought for £6m by recovery specialist Hilco and hedge fund Agilo. Thirty-three stores have been sold to Instore, the owner of Poundstretcher, and six stores to Belfast-based retailer Bedeck.
• Nevsport, a Scottish supplier of outdoor and snow sports equipment with 12 stores, went into administration in October. It is now owned by billionaire Mike Ashley.
• ePlay, the 123-store games chain, went into administration in Sept 2007.
• RONIT ZILKHA, the designer fashion retailer with five standalone stores and eight concessions, went into administration in September.
• ChoicesUK, the DVD retailer with retail, local and direct operations went bust in August. Its local and direct arms were sold to Findtel and Blockbuster bought 59 of its shops in September.
• Kwik-Save, the downmarket grocery chain, collapsed in July 2007. 90 stores were immediately closed and 1,100 people lost their jobs. These people had all have been working without pay for the last 6 weeks, as they responded to appeals by management which was unable to pay their wages. The other 56 stores may be saved and rebranded as FreshXpress by Irish businessman Brendan Murtagh. Don't hold your breath, though. Over the last year Kwik-Save (once the doyen of the discount operators established by Welsh entrepreneur Albert Gubay in 1959) has been in a mess. Previously part of Somerfield, it was 'saved' in 2006, but had a terrible Xmas and Jan 2007 with gaps on the shelves because it did not pay its bills. It apparently secured a £50 million rescue deal in February 2007, but whether the money was actually paid seems doubtful. Poor trading, high debt, and refusal to supply by food manufacturers created more problems in May/June and the Company closed 76 of its 228 stores. IN May/June 2007 it was in and out of court, fighting administration. It succumbed finally on 6th July.
• Hawkeshead, the clothing retailer rescued from bankruptcy in 2006, is to be broken up and sold off. It employed 400 staff, had 20 stores and T/O was around £25 million.
• Fopp, the 3rd largest UK music store, closed half its stores on Friday 22 June 2007 to carry out an urgent stocktake, announced a strategic review of the business, but went into administration a week later, blaming internet and supermarket sales of CDs and intense price competition. All 105 stores closed on 29 June 2007 and 700 staff lost their jobs.Fopp was a private company that had bought one-half of Music Zone a few months previously, which cannot have helped. HMV bought the name and some of its best stores over summer.
• The Natural World, the eco-gift retailer, has been unable to find a buyer since it went into administration in January.
• Klaussner, the furniture retailer with 29 stores and turnover of £27 million, went into administration for the second time in May 2007. 250 staff have lost their jobs. The sites are up for sale.
• Only2, the store chain set up by former Poundland boss that sold everything for £2, went into liquidation in April 2007. The six shops in Brierley Hill, Keightley, Swansea etc closed before Easter.
• Elle, the ladies fashionwear chain rescued from administration (as Actif) in 2006 and now operating as L Wear, went into administration again in March 2007, blaming cash-flow problems. 32 of its 40 outlets have been closed by the administrator and concessions in HoF have all closed. The business is likely to be sold by the Administrators in May in some form.
• Ravel: Goodbye Ravel. After five years of losses, Clarkes announced in May that it is finally closing the 50-store shoe chain that trades as Ravel.
• Goodbye Robbs Department Store, Hexham. Closing after 189 years of trading, its owners (Owen Owen) notified employees they had lost their jobs by sounding the fire alarm and holding an al fresco staff meeting in the car park.
• Toyworld, with 22 stores and 223 staff, went into administration in March 2007, blaming poor trading. The Company's parent is Youngsters.
• Owen Owen, which runs Lewis's in Liverpool, Esslemont & MacIntosh in Aberdeen, Robbs in Hexham (Northumberland), and Jopling's in Sunderland went into administration at the end of February. By May there was hope of reconstituting it as 'son of Allders'.
• Filmnight, the DvD rental business with 60 stores, was placed in administration. 14 stores have been purchased by Christopher Simpson.
• David Flatman , the discount book retailer that trades as Bookworld, Bargain Books and bw! went into administration in mid-February 2007.There were 50 stores (turnover £30 million) with 397 staff. Eight stores closed immediately with four more due to shut at the end of February.
• Stationery Box, the Warrington-based chain of 140 stationery stores, went into administration on 31 January 2007 blaming stiff competition from supermarkets and the internet. Theo Paphitis (Dragons' Den) had bought the company name and 61 stores only a few days beforehand.
• Right Price Tiles, the Swansea-based company with 53 stores, went into administration at the end of January. An earlier version of this company called Tiles-R-Us had done the same last year until being bought by the Irish concern, Railway Tile Store (note: imaginative company names in this sector of retailing).
• The Peak Store, a small walking/adventure clothing business with shops in Bakewell, Derby and Nottingham went out of business losing 30 jobs blaming mild weather, high costs and competition from multiples.
• H Plumb & Son, the Wigan-based electrical chain with 10 stores and 100 staff, is also in administration. It has closed 8 shops and dismissed three-quarters of the existing employees.
• Greeting Card Group, the second-largest UK greeting card store, went pop on 2 January 2007. It has 470 stores trading mainly as 'Cardfair' or 'Card Warehouse' and 2,500 employees. The turnover was £70 milllion.
• Music Zone,the independent music store chain, which sold itself as a cut-price alternative to Virgin and HMV, went into administration in early January affecting 1,100 staff and 103 stores. Fopp bought the company name, 67 stores, 3 warehouses before going bust themselves a few months later.
• Little Chef, the ubiquitous roadside restaurant chain with several previous owners, went into administration at the beginning of January 2007, having failed to obtain new funds over Christmas. 196 of the chain's 236 restuarants were later sold to a new owner in January, saving most of the 3200 jobs. The company is to be sold in July for £20 million the Benetton family (who own Autogrill in Italy).
  
  

Who Went Down in 2006?

• Olan Mills Photography
  Olan Mills, the photography business, has gone into administration. Administrators for the company, which collapsed with debts of £6mn in December 2006, were writing to an estimated 100,000 customers saying that it was "unlikely" that the photographs they ordered would be delivered in time for Christmas.
• Glyn Webb
  Glyn Webb, the DIY and home furnishings retailer, went into administration in December 2006. About 200 staff faced redundancy.
• Aftershock
  Aftershock, the womenswear retailer, went into administration early in 2006 and later handed its UK stores over to Winway Trading (its SA franchisee).
• Ilkeston Consumer Coop
  Again not bust exactly, but forced to merge with the Midlands Cooperative Society Ltd. Ilkeston Co-op was notorious in the Cooperative Movement for being uncooperative, avoiding partnerships with other Co-operative organisations and prone to giving them its advice.
• MFI
  Not bust exactly, but MFI sold the 200-store business to new owners for one pound in September and renamed their company Galiform. The new owner is the private equity business Merchant Equity Partners (MEP), which will continue to operate MFI as a going concern. A further injection of capital into MFI will be made by the former owner. MFI originally operated out of a single shop in Edgware from 1964 as "Mullard Furniture Industries". It rapidly became the national leading flat-pack retailer by the late 70s and took over Hygena. Loved by British retail academics and case-study writers, it merged with ASDA in 1985 to give it additional mass, creating ASDA-MFI. Galiform will now concentrate on the joinery business.
• Mikey
  The contemporary jewellery retailer with 28 outlets, which included standalones and concessions in Topshop and Selfridges, went into administration in July. Former New Look Director, Alan Wood and his wife Lisa bought the business for £ 621,000.
  
  
• PowerHouse
  The tough climate in the UK electricals retailing market was blamed by New Zealand-based owner PRG Group for its decision to put PowerHouse into administration. All 50 remaining PowerHouse stores were closed, with 500 of the retailer's 650 employees made redundant. Powerhouse was created out of the old Electricity Board showrooms (eg MEB and London Electric for older readers). Although it was the third largest electrical retailer in Britain, its market share was miniscule.
• Toymaster Kingdom
  Toy retailer Toymaster Kingdom called in administrators in September after falling victim to rising costs and tough trading. This Ipswich-based retailer operated 14 stores and employed 150 staff. The business, which is officially known as TM Kingdom is continuing to trade as normal and pay suppliers.
• Actif
  Retail group Actif, owner of the Elle brand in the UK, went into administration in April. The company ran out of cash just before quarter-day rents were due. In January, the group had run 16 stores and 40 concessions across the UK.
• Morgan UK
  Another icon went into administration in June 2006. The retailer's business model of licensing clothing from French parent company Morgan SA meant it was unable to compete on price with its high street rivals, such as Topshop and Jane Norman, which use the cheaper method of sourcing product directly. A tough consumer environment on the high street in general compounded its problems. Trading for the first six months of the financial year to June was poor, with like-for-like sales down 19.1 per cent to £11.8 million. In the end Morgan SA withdrew the distribution agreement with immediate effect (same as Kookai). Morgan operated 19 company-owned stores, 50 department store concessions and supplied 40 franchise stores in the UK. 600 staff were made redundant.
• Miller Brothers
  The family-run electrical business went into administration in May. A fast rescue deal enabled a management team led by the former CEO to purchase the Doncaster site together with the Miller Brothers Group's internet business www.millerbros.co.uk and several other internet brands. This saved over 100 jobs across the store, internet, warehousing and head office functions. As part of the rescue package, the new company continues to trade under the "Miller Brothers" banner.
• Baron Jon
  Baron Jon, the menswear retailer, went into administration in March.
• Dewhurst gets the chop
  Dewhurst Master Butcher was a great shop. It was the UK's biggest chain of butchers, operating 1,400 butcher's shops in Britain in the late 1970s (an owned by the famous/infamous Vestey family), but only 95 by 2006 with 400 staff. The directors called in administrators in March, blaming intense competition from the supermarkets and significant increases in costs. It closed 60 branches and enlisted administrator BDO Stoy Hayward to sell the remaining 35 stores.
  
  
• Silverscreen
  The DVD specialist backed by private equity giant Apax, went into administration in March just hours after approaching Richard Branson's Virgin Megastores chain about a sale or merger. The retailer was a victim of a tough market hit by fierce competition from free product given away with papers, supermarkets and pirated goods. There were 65 stores and 50 staff.
• Bewise and QS
  These value fashion chains which employed about 4,500 staff across 343 UK stores went into administration in February (poor trading). Since then, they have been rescued from administration, closed 163 of their stores, shut down the head office in Brighton and consolidated management operations at their Solihull warehouse. By November 2006, the 'Times'' Anne Ashworth was claiming QS could become the next Primark. Difficult to believe but this illustrates the strength of the company's turnaround. In January 2007, QS was bought by Alok Group, the Indian textile manufacturing company
• Sock Shop
  With 13 stores and around 100 concessions, this once iconic business of the early 80s (founded in 1983 by Sophie Mirman) that had once owned 150 shops went into administration (again) in February 2006. It was bought from the Harris Watson Group by Osan Ltd, part of Ruia Group.
• Capo Man & Woman
  This multi-brand fashion retailer closed 12 of its high street and shopping centre outlets in February making 130 staff redundant. Civic Enterprises, its ominously-titled parent holding company, was in administration after suffering losses of several millions of pounds. Five shops were left trading, pending finding new buyers.
• Kookai
  The French fashion brand retailer went into administration in January (the French parent withdrew support and obviously felt the UK chain showed poor retail acumen), but was later sold to Maurice and Michael Bennett, who had previously built up the Warehouse chain.
• MVC
  Music and DVD retailer previously owned by Woolworths with 67 stores was the first failure of 2006. Music Zone bought 41 stores from MVC which now trade under its own name.

NEWS OF 2005

During 2005, the retailers that collapsed or went into administration included:

• Past Times
• Allders Department Store (Croydon store rescued by Jaeger and still bears the name)
• Unwins Wine group
• All:Sports
• Furnitureland
• The Sofa Company
• Ciro Citterio
• the Gadget Shop
• Index
• Etam
• Pilot Clothing
  

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