Mike Ashley and Hilco among parties interested in making bids for 350 outlet company
Jewellery chain Links of London has collapsed into administration, putting up to 350 jobs at risk, in a new blow to the high street.
The chain, which operates 35 stores and concessions in the UK and Ireland, had been seeking a buyer before being put into administration on Tuesday. Sports Direct owner, Mike Ashley, and Hilco Capital, the owner of Homebase, had been reported as potential bidders in a last-ditch attempt to sell the loss-making business kicked off by its parent company in August.
Matt Smith, joint administrator for Links of London, said: “The company has had to contend with difficult trading conditions that have impacted the whole retail sector.
“The directors have been seeking alternative solutions, including consideration of a CVA, refinancing or sale, but have unfortunately been unable to conclude such a transaction.”
A CVA is an insolvency process that allows retailers to close stores and cut their rent bills if they can reach agreement with landlords.
Smith said the directors had run out of time to find a buyer: “In light of ongoing cash flow pressures, this has left the directors with no choice but to place the business into administration.”
The chain, founded in 1990 by John Ayton and Annoushka Ducas, is owned by troubled Greek company Folli Follie.
Links of London has more than 330 stores globally, with 28 stores and seven concessions in the UK and Ireland. Other international operations trading under the Links of London brand are unaffected. Links of London’s UK business reported a pretax loss of £20.5m and revenues of £42.9m in 2017, according to the most recent publicly available accounts.
“The company is well-known in its market having been present on British high streets for almost 30 years,” said Smith. “This is not the outcome we hoped for and will of course be difficult news for employees and their families.”
The administrator said no redundancies were being announced at this stage.
Last month, retailers and unions called for urgent government action to help struggling high streets as data showed the number of shops, pubs and restaurants lying empty was rising at the fastest pace in nearly a decade.
There was a net decline of 1,234 in the number of chain store outlets on Britain’s top 500 high streets in the first six months of this year, according to analysis by accountants PwC and high street analysts the Local Data Company (LDC).
Chains including Karen Millen, Jack Wills, Bathstore, Patisserie Valerie and Debenhams have gone into administration this year after the collapse of House of Fraser, Evans Cycles, Maplin and Poundworld in 2018. Some of those chains are still in business, taken over by new operators after their collapse, but have closed outlets.
About 57,000 retail jobs disappeared in the three months to August compared with the same period in 2018.
In August, Folli Follie confirmed it had appointed advisory firms Deloitte and Savigny Partners to look at potential sale options for the jewellery retailer.
Last year, Folli Follie was found to have overstated its 2017 revenues by more than €1bn, according to an audit ordered by the company. The audit found the company had overstated sales in Asia by 90%. Earlier this year, Greece’s securities regulator fined the company and 10 of its former and current top executives €20.3m over the manipulation of its financial statements.
(2019-10-09 Source: The Guardian)