Officers Club on the brink of administration
Tuesday 29 March 2011
Officers Club, the ailing menswear retailer, is poised to fall into administration for the second time in just over two years, leaving hundreds of jobs hanging by a thread.
The 106-store chain, which employs about 1,200 staff, is set to file a notice of intention to appoint Grant Thornton as administrator at a court as early as today. However, the expected administration of Officers Club could be followed by a potential rescue deal for half of its stores.
Blue Inc, the fast-growing menswear retailer, is believed to be one of the preferred front runners to buy about 50 of Officers Club's stores out of administration, which would save around 500 jobs at a time of tough trading conditions on the high street.
Several other potential bidders, including restructuring firms, have also looked at Officers Club. Its suppliers have been informed of the situation. Officers Club did not return calls, while Blue Inc and Grant Thornton declined to comment yesterday.
Officers Club, which is based in Northumberland, first collapsed in December 2008. The chain and its Petroleum brand format were subsequently bought out of administration by its founder and chief executive Dave Charlton, although he offloaded 32 of its 150 shops. If it should fail again this week, it is unknown if Mr Charlton will try to buy the company back for a second time.
It is unclear why Officers Club is on the brink of administration, but a lack of credit insurance and its second-quarter rent bill – which was due on Friday – may be contributing factors. Suppliers to Officers Club, like other retailers previously in administration, will have struggled to get trade credit insurance over recent years.
Many retailers have been hit by low footfall and tough trading so far this year, which means they have not been able to recover from a shortfall in festive sales due to the dire snowfall before Christmas.
If Blue Inc, which has 99 shops, does buy half of Officers Club's shops, it would grow its market share substantially in one fell swoop.
Blue Inc has grown its store numbers rapidly from 28 since it was bought out in 2006. The menswear retailer had been considering a float of the business this year, but these plans are thought to have been pushed back until next year. Like-for-like sales at Blue Inc rose by 1.7 per cent over the two weeks to 31 December.
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