January 2021 Administration and Insolvency News Round Up – Welcome to the New Year – Same as the old year?
That’s not to say we don’t recognise or look forward to it – Usually it’s a time of getting together with friends, enjoying fireworks and music and taking a moment, just after midnight, of quiet reflection on the events of the year just passed.
So what about the second year of the new decade?
Well so far, it’s very similar to the last one – in some instances even more restrictive with a new national lockdown and schools being closed forcing many parents into juggling home schooling requirements along with their regular jobs and parenting responsibilities.
And what about businesses?
Many remain locked down and unable to trade and several sectors that would have been banking on an improved or even normal Christmas trading period to bolster their balance sheets for the year or give them a sufficient boost to see them through to the Spring, remain in an unsatisfactory stasis.
So while we continue to strive to bring you some positive news, here’s our regular round-up of all the important administration and insolvency stories that you might have missed this month.
Edinburgh Woollen Mill and Bonmarche survive
A consortium led by the current CEO of the Edinburgh Woollen Mill (EWM) group has brought the brand out of administration, keeping some 1,984 jobs.
The sister brands of Ponden Home and Bonmarche were also included in the deal and will remain open although a total of 119 unprofitable stores and 500 positions will be lost under the new company.
The remaining EMW property, Peacocks, remains in administration while Marks and Spencer bought the Jaegers brand, but not the high street stores which will not reopen as a result.
Ann Summers switches lanes
Ann Summers. the adult fashion and relationship accessories store, has had a CVA approved by 90% of its creditors which will see 25 of its stores immediately switch to a turnover-based rent system.
No stores will close or jobs will be lost and this agreement will not affect the terms of its remaining 66 stores.
Chief Executive Jacqueline Gold said: “This has been a year like no other for Ann Summers. The pandemic presented new challenges for our business in 2020 which are likely to continue into the early part of 2021.
“There is still a very important place on the British high street for Anne Summers and with our store costs now largely rebased to reflect today’s much changed retail environment, we can not only continue to grow our strong and successful online and Party Plan channels, but our iconic stores will also be able to thrive once conditions return to normal.”
PaperChase looks to avoid folding
Cards and stationery retailer Paperchase has filed notice to appoint administrators as it continues to seek a way forward after a tough 12 months trading.
The group has 173 stores and concessions employing 1,500 staff and was particularly vulnerable to the pre-Christmas shopping restrictions as approx. 40% of it’s annual sales are made in November and December.
A spokesperson for the group said: “Out of lockdown we’ve traded well, but as the country faces further restrictions for some months to come, we have to find a sustainable future for Paperchase.
Originally founded in 1968, the company has had multiple owners including WH Smith and now defunct US bookseller Borders.
Paperchase entered into a company voluntary arrangement (CVA) with its creditors in 2019 to close some unprofitable stores and reduce rents by switching some to a turnover-based model but the unprecedented conditions of 2020 might have proved the final straw.
Game Over for Arcadia’s Outfit stores
The Arcadia group’s struggle to remain active continues as they announce the immediate closure of another 31 stores across the UK with the loss of 714 jobs.
21 of these included the Outfit brand which allowed shoppers to visit all of the Arcadia names such as Topshop, Wallis and Dorothy Perkins, in one convenient location.
The group entered administration in December 2020 and while the Evans brand has been sold, buyers are still being sought for all of the others with the administrators deadline drawing near.
The fate of 13,000 staff across over 700 stores remains in the balance.
While time can seem to be slowing down if you’re waiting for permission to reopen and begin trading again, it can also seem to move very fast if things start to go wrong or get out of your control.
Some help and funding remains available to businesses to mitigate the financial devastation caused by the pandemic but it still might be enough for a lot of businesses to manage until they can begin to open up and return to doing what they do best.
But this time of inactivity might also prove to be a time for taking action if you are worried about how you’ll get through these critical next few weeks and months.
There are still several options you can look at pursuing to either help secure your business so it can survive the ongoing lockdown or there can be ways to help you change direction and begin the new year with a new direction – but only if you start making those decisions very soon.