The UK high-street has taken another knock this week with the news that LK Bennett has gone into administration. The retailer’s descent into administration had an immediate effect with 55 job losses and other jobs threatened across the UK.
Five stores have already closed across the country, including two in London (Brent Cross and Westbourne Grove), Meadowhall (Sheffield), Bristol and Liverpool. The retailer has also suspended all online sales. The current fears are that the remaining 39 stores and 37 concessions could also close, leaving another 500 people out of work.
Hit hard by online sales and rising costs
There is some hope that the retailer can be saved. Administrators have been brought in from EY’s restructuring team. Their analysis of the situation is that rent and business rate increases in the past few years have made costs spiral out of control.
The multichannel retailer has been hit very hard in other areas as well. Some have said that the increase in Amazon’s dominance of the UK market is one factor, and research released this week has shown that 90% of UK shoppers use the retail giant for the vast majority of shopping.
Another problem that has caused the downfall of this proud brand is the cost of its clothing. Some dresses are now over £300, so most shoppers have to think twice before spending this amount.
What is most troublesome for retailers, however, is how little celebrity endorsement has helped the brand. The Duchess of Cambridge is said to prefer the LK Bennett brand and has been seen wearing their clothes.
BetterBathrooms also goes into administration
LK Bennett isn’t the only retail chain to go into administration recently. BetterBathrooms, the UK’s largest independent bathroom retailer, has also called in administrators. The chain has 13 showrooms with two trade counters across the UK. All of these have now shut their doors and ceased trading.
As a result, 325 staff have been made redundant while ten have been kept on to help wind-down the business.
Lower sales across the broad
There are also concerns that other stores could follow. Debenhams has recently stated that sales in stores have decreased by 6% in the past six months. It hopes to reduce the number of job losses and store closures, which is hardly a positive outlook for the future.
Ted Baker has also announced bad times. A profit warning was announced by the firm due to increasing costs and write-downs on stock.
If retail businesses don’t solve these issues, then there could be further bad news for the UK high-street and other retail outlets.