The fashion chain Coast has become the latest casualty of the high-street crisis, with 300 jobs and 24 stores set to go. The brand’s high-street stores are closing, but its 145 department-store concessions will carry on trading as part of the sale to sister brand Karen Millen as part of an 11th-hour rescue deal.
Staff were told on Thursday night that Coast had entered administration due to “difficult trading conditions” – but was then partly rescued by Karen Millen. The stores and its international outlets will remain in the hands of the administrators PricewaterhouseCoopers.
“The businesses had been facing financial difficulties due to structural challenges in the retail space and specifically the concession partner market, as well as a softening of demand for occasionwear,” said Mike Denny, one of the joint administrators. “This sale puts the ongoing business on a firmer financial footing.”
“Regrettably, other parts of the business, including 24 retail stores, were not included in the transaction,” continued Denny. “We will make every effort to help those employees in parts of the business that were not included in the sale.”
As part of the pre-pack administration deal, Karen Millen is buying the website and department-store concession arm, but not its UK or overseas stores. The company said it would continue to accept gift cards and returns.
Karen Millen’s chief executive, Beth Butterwick, who described Coast as a “much-loved” fashion brand, said: “We are excited to be welcoming over 600 Coast employees to the Karen Millen family. 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.”
Coast has been affected by tough high-street trading conditions that have also sparked the collapse of House of Fraser and problems at Debenhams, which has issued three profit warnings this year. More than 1,000 suppliers were left out of pocket when House of Fraser went bust in August, with Coast owed £1m. Its last set of accounts show Coast making only a tiny profit on sales of nearly £80m in the year to 25 February 2017.
Coast is owned by Aurora Fashions, which also owns retailers Oasis and Warehouse. The group is in turn owned by the Icelandic bank Kaupthing, which also owns Karen Millen. Kaupthing has been trying to sell its fashion interests for some years, having inherited them after the collapse of Icelandic investor Baugur during the financial crisis.
The news comes at a difficult time for the sector, with the likes of Maplin and ToysRUs all collapsing this year. New Look, Homebase and casual dining chains have also had to slim down their store portfolios, and Patisserie Valerie are the latest to hit the buffers.