High-street womenswear retailer Select, which employs some 1,800 employees, has fallen into administration.
The company operates 169 stores across the UK and trades as a value fashion retailer, targeting 18-35-year-olds with up to 4,000 fashion products.
Business advisory firm Quantuma were appointed as administrators yesterday (9 May), with Andrew Andronikou, Brian Burke and Carl Jackson overseeing the process.
In a statement, Quantuma said prevailing high street conditions have meant that the fashion retailer has been unable to sufficiently deliver on a turnaround plan it had embarked upon.
It added the joint administrators are assessing the available options for the business to ensure its future operations, noting there have been no redundancies made as a result of the administration.
“Due to ongoing financial difficulties, I can confirm that Brian Burke, Carl Jackson and I have been appointed joint administrators of Genus UK T/A Select,” said Andronikou.
“We will continue to trade Select whilst we assess all options available to the business, with the aim of achieving the optimum outcome for all stakeholders. Options include a sale of the business as a going concern, in addition to entering into discussions with those parties who have already expressed interest in acquiring the business.
“We will also be assessing CVA proposals which have been put forward by the directors.”
The news comes 12 months after Select used a company voluntary arrangement (CVA) to negotiate rent cuts of up to 75% from its landlords, according to a report published by the BBC today.
Honor Strachan, principal retail analyst at GlobalData, notes Select is another example where a CVA is not always the saviour for a troubled retailer, with deep-rooted commercial and operational issues beyond the help of a store cost-cutting exercise.
“However, with around 180 stores across the UK, one of the contributors to its downfall, and profit losses, has been the burden of its store estate,” Strachan says. “Rising costs and high business rates continue to make it extremely challenging for smaller fashion chains to operate profitably, forcing store closures and leading to share acquisition opportunities for the online pureplays as they can be more competitive on price and still produce better margins.”
The young fashion market has shifted so significantly in the last five years, that to its credit Select has managed to hold on until now, she adds, but the likes of Boohoo.com, Missguided and Asos, as well as physical players H&M and Primark, have innovated, adapted and responded to the changing needs of the 16-30 female audience – stealing share and leaving Select feeling outdated and lacking relevance.
“Select is the latest fashion casualty in a string of administration and CVA announcements in 2019, and we are not expecting it to be the last. The market will continue to become more concentrated, the high street more decimated and landlords more squeezed.”