Troubled Cath Kidston has bowed to the inevitable and filed notice that it will appoint administrators as the coronavirus crisis means its current turnaround program has no hope of continuing.
The move puts almost 1,000 jobs at risk and comes after the company had last month appointed advisers to conduct an urgent review of the business. This included the possibility of a quick sale.
Such options are still being looked at and while the intention to appoint administrators isn't actually an administration filing, it does gain the company some breathing space and protects it from its creditors.
The firm has struggled for some time and while it has reported no results recently (its last filing only covered the 12 months up to March 2018), during that year it made a loss of more than £10 million.
The firm had been mid-way through its turnaround plan when the coronavirus crisis hit its UK and international operations hard. But it's believed that there has been interest from possible buyers, although as always in these situations there’s a strong chance that any buyers might prefer to take the firm on via a pre-pack administration rather than as a going concern with all the liabilities that includes. A pre-pack would make it easier for any new owner to close unprofitable stores and to shed staff.
The company currently has 60 UK shops and is sold in 200 globally. It’s been owned by Baring Private Equity Asia since 2016, with that group’s interest having been excited by the huge potential it saw for the brand in the Asian market.
It's all so different from last year when, despite ongoing issues, the company was looking at expansion. It launched a new marketing campaign starring Poppy Delevingne, unveiled a Disney collaboration, appointed a new digital director who joined from Victoria Beckham and opened pop-up stores in Canada that were seen as forerunners of more permanent locations there.