December 23, 2008
Whittard to become UK's latest retail casualty
Retailers are hoping that a last-minute rush will avert a bloodbath on the high street this Christmas as figures released yesterday showed that the number of shoppers remained well down on last year.
The grim news came as Whittard of Chelsea, the upmarket tea chain, stood on the brink of administration last night. The 122-year-old chain, which is backed by Landsbanki, the collapsed Icelandic bank, called in Ernst & Young as standby administrator after Landsbanki cut its funding lines, it is understood.
December 24, 2008
Collapse of Whittard and Officer’s Club threatens hundreds more jobs
Whittard of Chelsea, the 122-year-old tea and coffee chain, went into administration yesterday as the British high street braced itself for a Christmas bloodbath.
Whittard’s 138 stores will stay open at least until the end of the year after the company’s administrator, Ernst & Young, negotiated a sale to Epic Private Equity, a specialist investor that already owns the novelty retailer Past Times.
Epic’s acquisition of Whittard will ensure that the brand survives, as well as safeguarding the majority of the chain’s 950 jobs. Epic will also take control of Boaters Coffee Co, Whittard’s subsidiary, which sells flavoured coffee. However, the sale still puts hundreds of jobs at risk because Epic is expected to consolidate Past Times, which has 100 outlets, and Whittard stores, closing shops in towns where both retailers have a presence.
Restructuring experts expect several more high street names to go into administration today as their lenders close them down before they have to pay rent bills due on Christmas Day.
The Officers Club, a 160-store men’s clothing chain, is expected to be put into administration today by PricewaterhouseCoopers, which has been standing by for the appointment for several days.
Baugur, Whittard’s Icelandic owner, will lose all the money that it invested in the company since buying it in 2005. Whittard’s lender, the collapsed Icelandic bank Landsbanki, stopped putting money into the chain several weeks ago. Problems are growing for Baugur, which owns stakes in other well-known British retailers, including House of Fraser, and Whistles, the fashion chain that slashed its prices by 50 per cent yesterday.
Baugur declined to comment yesterday, but a source close to the company conceded that Mosaic, its subsidiary that has stakes in fashion stores such as Karen Millen, is struggling with very difficult trading conditions. It is understood that Baugur is looking for a new lender for Mosaic, which is backed by Kaupthing, another collapsed Icelandic bank. Baugur is also considering putting more cash into Mosaic next year.
Whistles, which is run by a former director of Topshop, Jane Shepherdson, is also backed by Icelandic banks that have collapsed. However, a source close to Baugur said that none of its other companies would go into administration over Christmas. “I’ll eat my hat if that happens,” the source said.
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