// Baring Private Equity Asia is to buy Cath Kidston assets in pre-pack administration deal
// Almost all of Cath Kidston’s 60 UK stores would shut & the business would focus on trading online and wholesale
// The move places 740 jobs at risk
Cath Kidston’s 60 UK stores are at risk of all being shut down permanently and 740 jobs could be at risk as the retailer’s owners mull accepting a pre-pack administration deal.
According to Sky News, Cath Kidston parent company Baring Private Equity Asia is to buy the brand, commerce platform and wholesale business from administrators.
This means almost all of Cath Kidston’s UK stores would shut and the business would focus on trading online and wholesale.
READ MORE:
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- Cath Kidston the latest to prepare for administration amid coronavirus crisis
- Cath Kidston at risk of being next coronavirus casualty as it urgently seeks buyer
The news comes after the retailer filed a notice of intention to appoint administrators earlier this month and placed Alvarez & Marsal on standby for the process.
A notice of intention to appoint administrators meant Cath Kidston was granted 10 days of breathing space and protection from creditors.
Advisers from Alvarez & Marsal had been drafted last month to undertake an urgent review of Cath Kidston’s strategic options, which at the time had been racing to find a new buyer as the impact of the coronavirus pandemic pushed the loss-making business over the edge.
The retailer has more than 100 stores overseas, especially in Asia, although it appears this arm of the business would be untouched by the pre-pack administration deal in the UK.
Baring Private Equity Asia became a substantial shareholder in Cath Kidston in 2014 before it took full control in 2016.
The British retailer, which sells clothes and homeware, lost more than £27 million in the last two financial years.
It also 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.
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