// Cath Kidston to permanently to shut all 60 UK stores with the loss of 908 jobs
// Owner secured a deal to buy back Cath Kidston’s brand & website following its fall into administration
// Only 32 of its 940 staff will see their jobs secured as part of the deal
Cath Kidston is to permanently to shut all 60 of its UK stores, resulting in the loss of 908 jobs after the retailer fell into administration.
The retailer confirmed its British stores would not reopen after the coronavirus lockdown is lifted after parent company Baring Private Equity Asia secured a pre-pack administration deal that saw it buy back Cath Kidston’s brand and online operations.
Baring Private Equity Asia said it would buy the online business, brand and wholesale arm from administrators Alvarez & Marsal.
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It said the move will result in the “cessation of the retail store network” and Cath Kidston would now only trade via online and wholesale.
Baring Private Equity Asia added that only 32 of Cath Kidston’s 940 staff will see their jobs secured as part of the deal.
The retailer has more than 100 stores overseas, especially in Asia, although it appears this arm of the business is untouched.
“While we are pleased that the future of Cath Kidston has been secured, this is obviously an extremely difficult day as we say goodbye to many colleagues,” Cath Kidston chief executive Melinda Paraie said.
“Despite our very best efforts, against the backdrop of Covid-19, we were unable to secure a solvent sale of the business which would have allowed us to avoid administration and carry on trading in our current form.
“I would like to thank all our employees for their hard work, loyalty and patience over the last few weeks as we worked through this process.”
A Baring Private Equity Asia spokesman said: “While we are disappointed that the Covid-19 crisis has resulted in the cessation of the retail store network and impacted many employees, we are pleased to have secured a future for a number of Cath Kidston staff and the Cath Kidston brand in the form of a viable digital business.
“Going forward we will continue to help the company grow through its e-commerce platform and international wholesale and franchise businesses.
“We would like to thank Melinda and the company’s management team for their hard work in managing through this difficult economic crisis and establishing a viable future for the business in the UK.”
The news makes Cath Kidston the latest retail casualty brought about by the coronavirus pandemic.
Other high street stalwarts that have fallen victim to the insolvency process in recent weeks include Laura Ashley, Debenhams, Oasis and Warehouse, and BrightHouse.
Advisers from Alvarez & Marsal were initially 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 retailer over the edge.
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.
Prior to the pandemic, Paraie’s turnaround strategy for Cath Kidston had started to bear fruit thanks to the launch of a new ecommerce platform and slashing operating costs by reducing head office staff by 40 per cent and closing underperforming shops.
with PA Wires