// Cath Kidston urgently needs a new buyer to avoid becoming next UK retail casualty amid coronavirus pandemic
// Advisers from Alvarez & Marsal hired to undertake an urgent review of strategic options
// Offers are reportedly required imminently
Cath Kidston is reportedly in a race to find a new buyer in a bid to stave off becoming the next UK retail casualty in the coronavirus pandemic.
According to Sky News, Cath Kidston has hired advisers from Alvarez & Marsal to undertake an urgent review of its strategic options.
Prospective bidders have also already been reportedly told last week that offers were required imminently for the retailer.
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Cath Kidston employs about 800 people across 60 stores in the UK.
It also has more than 100 stores overseas, especially in Asia, although it is not clear of its international arm is part of the business review.
Baring Private Equity Asia became a substantial shareholder in Cath Kidston in 2014 before it took full control in 2016.
The coronavirus pandemic, as with many other retailers, has worsened Cath Kidston’s financial state and fears are mounting that administration may be an outcome for the retailer if a new buyer is not found soon.
The British retailer, which sells clothes and homeware, lost more than £27 million in the last two financial years.
Sky News reported that it recorded an additional loss of £11 million before interest, tax, depreciation and amortisation in the nine months to December, according to information sent to potential bidders.
However, it’s thought that chief executive Melinda Paraie’s turnaround strategy for Cath Kidston had started to bear fruit prior to the coronavirus pandemic.
This includes cutting operating costs through a 40 per cent reduction of head office staff and closing underperforming shops, and a boost in online sales thanks to a new ecommerce platform,
“Cath Kidston has been actively implementing a new business strategy to support the growth of the brand while managing the many pressures in the retail sector,” a spokesman said told Sky News.
“This includes dealing with the outbreak of Covid-19, which has been impacting the business globally since the beginning of the year.
“We have therefore initiated a process to explore options for the business, to enable the management team to continue implementing their strategy to deliver growth.”
Laura Ashley is thought to be the first victim of the Covid-19 crisis in UK retail, after it filed for administration last week when rescue talks for an urgent £15 million lifeline were shelved amid the coronavirus outbreak.
The announcement placed up to 2700 jobs at risk.