Blog: Faith shrinks in shoe chains
Joe Ayling | 26 April 2010
It was confirmed last week that UK women's shoe chain Faith had entered administration, after days of speculation.
The rumours began with reports that suppliers wanted the embattled footwear retailer to return stock from its stores. Before long there were also reports that restructuring specialist Hilco was to buy Faith's GBP14m (US$21.6m) worth of debt.
All this led to a suspicion that administration was likely, and all was quiet at Faith Shoe Group HQ. Indeed, before too long news of Faith's administration joined earlier developments tweeted on Twitter.
Administrators Heath Sinclair, Rod Weston and Mike Wellard from accountancy firm Mazars are now tasked with selling the latest UK shoe chain to lose its footing in a dire trading environment, with Dolcis, Stylo and Stead & Simpson all taking similar measures in recent years.
Prior to appointing administrators, Faith hired accountants Grant Thornton to explore a potential sale, and Mazars will now pick up where they left off. Sinclair says: "We are currently liaising with interested parties in an attempt to facilitate a going concern sale. We will be working closely with the businesses’ stakeholders in an effort to preserve a well known retail brand."
It was only 15 months ago that Faith was rescued by retail entrepreneur John Kinnaird and investor Agilo after briefly going into administration, but it now appears to be back to square one.
Collective owners FEC Holdings said that despite extensive restructuring at the time, it became apparent the business remained "significantly over-leveraged". Such an evaluation will be a concern for Faith's 1,744 workers, which work in 78 stand-alone stores and 120 concessions in the UK.
Coupled with the recent recession, shoe chains are facing increased competition from value chains selling head-to-toe fashion, and it is little wonder that suppliers are getting jittery.
By Joe Ayling, news editor.
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