High Street Woes Continue With Bonmarché Appointing Administrators
The UK high street has been dealt another blow as Bonmarché, the women’s fashion chain, announces it has appointed administrators. The future of the company remains in doubt with up to 2,900 potential job losses in the UK at 318 stores.
The blame for the loss of one of the most recognisable high street stores has been firmly laid on the challenging conditions of the high street and uncertainty surrounding the Brexit deal.
Harsh High Street Climate
Helen Connolly, the company’s chief executive, has stated that they’ve tried for months in order to try and rescue the brand. However, their business model just wasn’t effective in the current business climate.
She also added that pressures from Brexit had taken its toll. She believed that had Brexit been concluded earlier then the company could have been saved.
No Option But Administration
The firm had been considering to refinance or secure a rescue deal. However, the chief executive stated that neither of those options had any potential to save the company.
One of the challenges facing high street stores at the moment is the high rent for key locations in town centres.
Had Bonmarché sought a rescue deal, they might have been able to renegotiate these high rents.
The retailer has been in trouble for a while. It had given a profit warning earlier this year. This resulted in a 14% downward turn in shares.
Trading As Normal, For Now
Philip Day, the Edinburgh Woolen Mill Group owner, is Bonmarche’s majority owner. He has a 95% stake in the company which is held via Spectre.
The investment group has stated that they are disappointed by the news and that their thoughts are currently with the company’s employees and their families.
FRP Advisory have been made the administrators for Bonmarche. They had stated that there have been no redundancies at the moment and that while they assess the situation and look for a buyer, the company will continue trading as normal.
The administrators believe that there are few potential buyers in the business.
Bonmarché might not be the last of the bad news for the high street before the end of 2019. Several major names, including Debenhams and New Look, are also closing stores.
Without a significant improvement in the UK’s economic climate, high street stores will face further pressures that could lead to more high-profile brands disappearing soon.