Bonmarche became the latest victim of Britain’s retail crisis today after collapsing into administration as shoppers returned to high streets on the first day after the national lockdown was lifted.
It is the second time in just over a year that the womenswear brand has entered administration with more than 1,500 jobs at risk, but none of the chain’s 225 stores face closure.
The announcement is another blow to the UK’s high street, which has suffered 275,000 job cuts and losses since the coronavirus pandemic began.
It also comes after both Debenhams and Sir Philip Green’s Arcadia empire collapsed into administration this week.
RSM Restructuring Advisory, which has been appointed to handle the administration, said all of Bonmarche’s 225 stores will remain open and there are no redundancies yet as it looks to agree a rescue deal.
It follows Bonmarche plunging into administration in October 2019, before administrators agreed a rescue deal with retailer Peacocks.
Despite the deal, 30 stores were closed before last Christmas, affecting hundreds of jobs at the group.
Damian Webb, joint administrator of RSM Restructuring Advisory, said: ‘Bonmarche remains an attractive brand with a loyal customer base.
‘It is our intention to continue to trade whilst working closely with management to explore the options for the business.
‘We will shortly be marketing the business for sale, and based on the interest to date we anticipate there will be a number of interested parties.’
The brand has struggled with rising costs, such as business rates and rising wages, as well as dwindling footfall on UK high streets.
Bonmarche was previously bought in a rescue deal by private equity firm Sun European Partners in 2012.
The company was later floated on the London stock exchange before retail tycoon Philip Day purchased a majority stake earlier this year.
A large number of shareholders then sold their stakes to Mr Day, giving him a 95 per cent ownership in the struggling retailer.
It comes as 242-year-old chain Debenhams cuts prices by up to 70 per cent today, ahead of the company’s impending liquidation.
The department store is set to be liquidated by the new year after JD Sports scrapped its proposed rescue deal following the collapse of Arcadia group.
Arcadia, which owns Topshop, Miss Selfridge, Dorothy Perkins and Burton, tipped into administration, putting 13,000 jobs at risk.
Debenhams has said it will continue to trade in its 124 shops and online with a fire sale of its stock as the national lockdown ends today, on a shopping day being branded ‘Wild Wednesday’ as all non-essential shops are allowed to open.
A precursor to the likely stampede for generous discounts at Debenhams was seen last night when more than a million people swamped the department store’s website.
Chancellor Rishi Sunak earlier declared the Government ‘stands ready’ to help the 25,000 Debenhams and Arcadia workers in ‘deeply worrying’ times.
He added: ‘There are negotiations between various parties and the companies at the moment – particularly with regard to pensions – and it wouldn’t be right for me to comment specifically on those’.
Mr Sunak’s offer of help came days after he used his spending review to commit the Government to spending £1trillion for the first time and revealed that borrowing would hit an unprecedented £400billion this year as he bankrolls the UK’s response to coronavirus.
It is not clear from Mr Sunak’s statement whether taxpayers’ money will be offered to Arcadia or Debenhams – or their pension schemes – but the 25,000 people they employ will be eligible for benefits if they are made redundant.
Customers with gift cards are being urged to spend them as soon as possible with administrators expected to block their use in the coming weeks as the business winds down. But people who have ordered items for Christmas online are now panicking they may never arrive with no chance of a refund.
Experts previously called the collapse of the two giants one of the most ‘devastating’ weeks in the history of British retail with up to 25,000 workers put at risk of redundancy in the space of 12 hours.
The number of job losses is so large it equates to losing the entire labour force of the UK fishing industry overnight.
Healthy fast food chain Leon has also launched a restructuring deal which aims to slash its rents after it was impacted by closures during the pandemic and severely depressed footfall.
The chain, which was founded by John Vincent and Boris Johnson’s ‘food tsar’ Henry Dimbleby, has circulated proposals for a Company Voluntary Arrangement (CVA).
The plans, which will require the green light from creditors, will see four of Leon’s sites move to a rent-free model while a large number of sites will have turnover-based rents.
Leon, which operates 75 sites globally, said the restructuring comes as it continues to suffer from ‘severely reduced footfall numbers’ following the second national lockdown in England.
It said it expects revenues to continue to be weighed down by local tiered restrictions which have started today.
The company is one of a number of chains, including Pret a Manger and Caffe Nero, to be hit by a significant fall in the number of city centre workers.
Caffe Nero passed its own CVA plan yesterday, while other food chains such as Pizza Hut, Wasabi and Wahaca have also used the restructuring method since the start of the pandemic.
John Vincent, founder and chief executive officer of Leon, said: ‘The CVA is intended to provide the company with a foundation to first survive and then carefully rebuild.
‘We had a growing and profitable business before Covid. Despite taking many actions to reduce cost and optimise revenue during the crisis, the continued lockdowns and restrictions have made this CVA a necessity.’
Meanwhile, Boris Johnson last night overcame the largest Tory rebellion of his premiership for his new tier system to clear the Commons by 291 to 78, with abstaining Labour MPs getting the vote across the line.
It heralds a return to the Government’s previous strategy of carving the country into three ‘alert levels’ – albeit this time with harsher measures and with 99 per cent of the country facing the top two tiers.
Pubs have had their curfew extended to 11pm but are grappling with the fresh regulations. In Tier 2, they can only serve alcohol with a ‘substantial meal’ and in Tier 3 they are limited to just takeaways.
How the collapse of Arcadia and Debenhams spells more major job cuts and losses with the total now over 275,000 since the Covid-19 pandemic began
Around 13,000 jobs are at risk after Sir Philip Green’s Arcadia Group edged nearer to appointing administrators after being hit by the impact of the pandemic.
The group, which cut 500 roles earlier in the year, is expected to collapse in the coming days and has lined up insolvency specialists at Deloitte.
It adds to more than 275,000 job losses or potential redundancies announced since the start of the pandemic.
Here is a list of some of the high-profile British employers that have announced major cuts since March 23: