Women’s fashion retailers Oasis and Warehouse have appointed administrators, with the immediate loss of 200 jobs and more than 2,000 other roles at risk.
Coronavirus and administration
The companies’ owner, Icelandic bank Kaupthing Bank, had been in discussions with a prospective buyer for the two fashion brands over the past few weeks. However, according to Sky News, the coronavirus pandemic made a solvent sale impossible to conclude.
Around 2,300 are employed by the group, which trades from 90 standalone stores and 437 concessions in department stores such as Debenhams and House of Fraser.
Administrator Deloitte has furloughed 1,800 of the retailers’ staff, but 200 have been made redundant.
Earlier this week, a High Court judgment provided clarity around how administrators should apply the Coronavirus Job Retention Scheme for staff whose employer has begun insolvency proceedings.
Hash Ladha,chief executive of Oasis Warehouse, said: “This is a situation that none of us could have predicted a month ago, and comes as shocking and difficult news for all of us.
“We as a management team have done everything we can to try and save the iconic brands that we love.”
The retail sector has faced significant challenges since the coronavirus pandemic forced non-essential stores to temporarily close. Last week Debenhams went into administration, putting around 22,000 jobs at risk; while floral fashion company Cath Kidston, which employs 950 people, filed for administration.
In March, homeware retailer Laura Ashley appointed administrators after it had been unable to secure new funding because of uncertainty around how it would be affected by the Covid-19 outbreak.
The restaurant sector has also been hit hard by the virus, with Carluccio’s and Chiquito beginning insolvency proceedings last month.
Retail expert Dr Gordon Fletcher of the University of Salford Business School said the coronavirus had placed unexpected pressure on high street businesses.
He said: “The current health emergency has brought another unexpected pressure. Despite its name, fast fashion does have long lead times and supply chains that stretch around the world. This form of operation still brings containers of clothing to warehouses but now without the opportunity to put the goods in front of consumers. With no footfall on the high street the single distinguishing feature between the high street and online retailers has instantly disappeared.”
This article was updated on 16 April.