Online sales remain suspended at luxury retailer LK Bennett this morning after the retailer went into administration last night, with the immediate loss of 55 jobs. Administrators from EY said the increasing cost of trading its stores, most found in shopping centres and premium locations, had hit the multichannel retailer hard.
The multichannel fashion retailer, founded in 1990 by Linda Bennett, employs about 500 people in total, working at 39 UK stores, 37 concessions and at its head office. Five stores, at Sheffield Meadowhall, Bristol, Liverpool, and, in London, at Brent Cross and Westbourne Grove, have closed and redundancies are also being made in the LK Bennett head office. Web sales have been suspended temporarily so that the administrators can be sure that customer orders will be processed and delivered as usual.
Administrators were appointed from EY’s restructuring team.
EY’s Dan Hurd, appointed joint administrator, said: “Amidst tough trading conditions for retailers, the company has been further impacted by significant rent increases and business rate rises. Linda and the management team therefore made the difficult decision to place the company into administration to protect the future of the business.”
LK Bennett’s international operations are not included in the administration process.
Hurd added: “LK Bennett is a strong luxury UK brand, the new season collection was critically acclaimed and recent trading is up, which we hope will be attractive to prospective buyers.”
Catherine Shuttleworth, chief executive at shopper marketing agency Savvy, says the cost of running the store estate at a time when more shoppers were buying online, coupled with rising prices, may have made the business unsustainable despite the celebrity endorsement it gained when the Duchess of Cambridge wore the label.
“Pricing at LK Bennett has really rocketed," said Shuttleworth. "Wiith dresses now costing £325 it has left many of its shoppers behind. Whilst it might be okay for Duchesses, most women will have to think twice before spending over £200 on a dress let alone £300. That combined with expensive store estates and a shopper who is spending more and more time online, it seems like the numbers aren’t stacking up. There will be interested parties in the brand I’m sure - probably including Mike Ashley - but it needs some reinvention to woo its core shopper back. Let’s hope it lives on as life without a pair of LK Bennett heels is a little bit less exciting.”