Karen Millen says Coast, which it bought out of administration yesterday, has a "thriving" future ahead of it.
The brand, whose administration was announced at the same time as the acquisition, will now trade online and through concessions – its 24 standalone stores were not included in the deal. Around 300 jobs are being lost as a result. Double that number of staff, working in its concessions, online and head office operations, are joining Coast.
Karen Millen chief executive Beth Butterwick says the occasionwear business has potential for growth across those remaining sales channels.
"We are excited to be welcoming over 600 Coast employees to the Karen Millen family," said Beth Butterwick, Karen Millen chief executive. "With its beautiful fabrics, stunning colours and signature designs, Coast is a much-loved fashion brand that has dressed women for all occasions since 1996. Our expertise and infrastructure puts us in a unique position to create a lean and profitable business, ensuring it remains a thriving destination in department stores and online."
Mike Denny, joint administrator and PwC director, said the failure had come about as a result of financial difficulties as a result of "structural challenges in the retail sector and specifically the concession partner market as well as a softening of demand for occasion wear."
He added: "We will make every effort to help those employees in parts of the business that were not included in the sale and will support those affected at this difficult time."
Commenting on the news, Kate Ormrod, lead retail analyst at GlobalData, said the failure of House of Fraser in August had hit Coast’s concessions in its stores, leaving the business almost £1m out of pocket.
She added: "Though its downfall was cemented by House of Fraser’s collapse, the business is now even more dependent on department stores. With a swift revival at Debenhams - where Coast has a vast number of concessions - looking unlikely, the womenswear brand remains in a precarious position." Both Karen Millen and Coast target the same 25 to 45-year-old customers, she said, adding: "Karen Millen must invest in service and quality at Coast if it is to rebuild the brand – with a focus on showcasing value for money vital to prosper in the competitive premium clothing market."