Thursday, 30 April 2020

Game over as Hilco buys Oasis, Warehouse, but all stores are axed




The coronavirus crisis claimed thousands of more jobs on Thursday as a deal was struck to sell the group comprising Oasis, Warehouse, and smaller brand The Idle Man to Hilco Capital. Their stores aren't part of the deal.

Hilco, which used to own HMV, has simply acquired the labels and their outstanding clothing stock. It's not known how much it paid but it seems that the brands will now cease trading. What's also clear is that, with the currently shuttered shops never set to reopen, more than 1,800 staff are facing immediate redundancy. That's on top of the 200+ jobs that have already been shed.

A news report also said that they will receive no statutory redundancy pay from the company, which means the state will be responsible for redundancy payments.

The Oasis and Warehouse Group had been seeking a solvent sale prior to its administration filing, but time ran out and it was completely derailed by the coronavirus crisis and the retail lockdown that resulted.

Rob Harding, the joint administrator at Deloitte, said Covid-19 meant “extraordinary challenges which have devastated the retail industry”. He added that a sale of the business on other terms simply wasn’t possible.

Meanwhile, analysts said the news highlights the increasing issue of too many physical stores in UK fashion retail, and the problems both retail landlords and department stores are facing right now.

Sofie Willmott, Lead Analyst at GlobalData, said: “Like the Gordon Brothers' rescue deal for Laura Ashley, investment firm Hilco's purchase of the Oasis and Warehouse brands excludes their store portfolios, bringing yet more bad news for retail landlords that have already been hard-hit by the pandemic. With the online channel accounting for almost 30% of UK clothing & footwear spend in 2019 and the shift to digital being accelerated in 2020 due to non-essential store closures, companies buying up retailers are not interested in their physical estate.”

She said that while Oasis and Warehouse operated only around 90 standalone branches (a far smaller estate than many of their competitors), they were present in over 400 department stores. This will leave “struggling retailers like Debenhams and House of Fraser with gaping holes in their womenswear stock when they are able to reopen. With more clothing specialists at risk of collapse over the next few months as demand for fashion items remains depressed, department store retailers are at risk of losing more of their third-party brands.”

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