Austin Reed collapses putting 1,000 jobs at risk after administrators fail to find buyer
Beleaguered retailer will now close 120 shops after Edinburgh Woollen Mill only purchased the brand
MENSWEAR chain Austin Reed has collapsed putting 1,000 jobs at risk after administrators failed to find a buyer for the struggling business.
The beleaguered retailer will now close 120 shops, after Edinburgh Woollen Mill only purchased the brand and five concessions within Boundary Mills outlets.
The firm, headed by Philip Day, did not want to take on the 116-year-old company’s entire store estate.
Administrator AlixPartners said "no viable offers" for the rest of the business could be found, and the premises will now be sold off to other retailers.
Austin Reed fell into administration in April, but the news comes amid a torrid time for the high street, with the fate of department store BHS set to be revealed later this week.
Up to 11,000 staff at the chain face redundancy, with a probe into its sale and pension scheme underway.
Peter Saville of AlixPartners said: "We have explored all options to sell the business since our appointment and continued to trade the business with the support of the secured creditors in what is clearly an extremely challenging retail environment.
"Despite a significant number of interested parties coming forward during this period it became clear as the process progressed that a viable solution which kept the business whole was not forthcoming.
“As a result we have made the difficult decision to cease trading the business and commence a wind-down of the estate."
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A number of bidders were mooted to be interested in Austin Reed after its owner, the distressed retail specialist Alteri Investors, threw in the towel last month.
They included Mike Ashley's Sports Direct, but a suitable offer did not materialise.
Austin Reed was founded in 1900 as a tailoring business in the City and once counted Winston Churchill and Elizabeth Taylor as customers.
But retail experts have bemoaned the firm's failure to adapt to a multi-channel environment.
Rupert Eastell, head of retail at business advisers RSM, said: "The company's offer has been inconsistent, the ranges have been poor and the stores have looked rather tired.
“Perhaps most disappointingly, the website is not good enough by today's standards.
"It's certainly true that there has been a trend away from formal wear in recent years, but Austin Reed's competitors have demonstrated that you can be successful in this part of the market."
Austin Reed Group has been in trouble before, after it was forced to close 31 unprofitable stores last year using a company voluntary agreement.
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