Jane Norman is latest casualty of retail gloom
Tuesday 28 June 2011
Jane Norman became the latest high-street name to collapse into administration yesterday amid dire conditions for Britain's retailers.
The troubled women's fashion chain is now in the hands of Zolfo Cooper, the corporate restructuring firm, threatening 1,600 jobs after attempts to find a buyer ran out of time. Zolfo Cooper said: "Following a period of testing trading conditions, the company has experienced severe cash-flow difficulties which resulted in the board requesting the appointment of the administrators."
Retailers face a storm of terrible trading conditions as consumers rein in spending, raw materials costs surge and rents remain high.
The conditions have spawned a new wave of failures at household names after Woolworths led a shakeout in the high street at the start of the recession.
Habitat was forced into administration last week with Home Retail Group, which owns Argos, buying just three stores and the brand. HomeForm, the owner of Möben and Sharps kitchens, is on the brink of administration.
HMV, the entertainment chain, is struggling on but yesterday announced it had sold its 121 Canadian stores to Hilco, the retail restructuring specialist, for £2m.
Nick Moser, the head of the insolvency team at the law firm Taylor Wessing, warned that more retailers would be forced into administration.
"The September quarter day for rent payments is going to push even more retailers into administration because cash flow is stretched to the absolute limit to allow for Christmas stock. These are very tough conditions for even the best-performing retailers."
Jane Norman was owned by Baugur, the defunct Icelandic retail empire, and Kaupthing, the collapsed Icelandic bank. After the Icelandic banking crisis, a syndicate of 15 banks took control of 80 per cent of the shares in a debt-for-equity swap.
PwC was appointed to find a buyer for Jane Norman early this month after the banks ran out of patience with the chain. It had aimed to line up a buyer before Jane Norman went into administration in a so-called pre-pack arrangement.
Debenhams, which hosts several Jane Norman concessions in its stores, is in the running to buy the brand name and stock – a deal that would force the closure of the chain's standalone stores. Rival bidders include Edinburgh Woollen Mill.
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