Fashion chain Coast collapses with loss of 300 jobs as Karen Millen buys concessions business
Clothing chain Coast has collapsed into administration, becoming the latest retailer to be hit by Britain's high street woes and putting 300 jobs at risk as it closes stores
The firm's staff were told on Thursday evening that PwC has been drafted in to carry out the process, with all 24 standalone sites, including the Lower Temple Street store in Birmingham, to close.
Rival Karen Millen has bought the group's brand and website, taking on 600 staff, but 300 jobs are now at risk.
Karen Millen has also bought the concessions arm of the business and will maintain its outlets at stores including Beatties in Wolverhampton, House of Fraser in Telford, Merry Hill and Birmingham, and also at Birmingham's Debenhams and John Lewis department stores.
Coast has been hit hard by the collapse of House of Fraser, which went into administration earlier this year owing millions to retailers with concessions within the department store.
Coast is owned by Aurora Fashions, which also owns retailers Oasis and Warehouse.
Aurora itself is owned by Icelandic bank Kaupthing, which in turn owns Karen Millen.
Mike Denny, Ian Green and Zelf Hussain of PwC were appointed late yesterday as joint administrators of Coast and immediately struck what is thought to have been a pre-pack deal that saw Karen Millen acquire the online and concessions business.
Karen Millen will also continue to work with existing wholesale and franchise partners.
Mike Denny, a director of PwC, said: “The businesses had been facing financial difficulties due to structural challenges in the retail space and specifically the concession partner market, as well as a softening of demand for occasion wear.
“This sale puts the ongoing business on a firmer financial footing. Karen Millen will be working with the existing management team to continue to grow and develop the new business.
“Regrettably, other parts of the business including 24 retail stores were not included in the transaction. We will make every effort to help those employees in parts of the business that were not included in the sale and will support those affected at this difficult time by liaising with the Redundancy Payments Service and Job Centre Plus.”
The news comes at a difficult time for the sector, with the likes of Maplin, ToysRUs and House of Fraser all collapsing this year.
New Look, Homebase and casual dining chains have also had to slim down their store portfolios, with Patisserie Valerie the latest to hit the buffers.