Shoe shop Barratts has become the latest victim of cut-throat competition on the high street after it was forced to call in the administrators on Thursday, threatening almost 4,000 jobs as Christmas looms.
Barratts Priceless Group, which is controlled by Michael Ziff, has 191 shops – including one on Oxford Street opened only last year — and 371 concessions. Deloitte has been appointed administrator.
The news came as speculation grew that a huge round of store closures was under discussion at Peacocks, the struggling clothes retailer chaired by Allan Leighton, formerly an Asda director and chairman of Royal Mail.
Sources said up to 200 shops could be axed in a bid to turn around the performance of the business, which has £240m of debt. Shareholders include the US investment bank Goldman Sachs and lenders include Royal Bank of Scotland.
The company was unwilling to comment on any closures. It said: "We continue to progress our restructuring discussions and plans, with no decisions taken at this point."
Barratts's move is the second time in as many years that it has been forced to seek protection from creditors and comes 24 hours after the outdoor clothing retailer, Blacks Leisure, said it was looking for an emergency buyer.
Daniel Butters, joint administrator and partner in restructuring services at Deloitte, said: "Barratts and Priceless Shoes have faced a downturn in trading as a result of the difficult economic conditions. This has been exacerbated by the unseasonably mild weather in recent weeks which resulted in fewer sales across new winter lines." Industry experts said Barratts was under pressure from low-cost stores such as Primark rather than direct rivals such as Clarks. But critics argued the latest crisis showed the company had failed to take tougher action earlier.
Deloitte said it would continue to keep Barratts trading while seeking a buyer for all or part of the business, in a bid to save 3,840 jobs.
It hopes to repeat the rescue of 2009, when the retailer was put into administration but 160 of 280 stores were bought back by Ziff, a veteran shoe retailer and chairman of the Stylo group.
Privately owned Barratts Priceless Group made a pre-tax profit of £6.1m on a turnover of £218m in the 18-month period to 31 July last year, according to accounts filed at Companies House.
In October, Barratts announced Richard Segal would become chairman. He said at the time: "Like many other retailers, the company is currently operating in a challenging economic environment and I look forward to working with the executive team to accelerate its adaptation to recent market changes."
In a newspaper interview less than 12 months ago, Ziff said he was still scarred by the "traumatic" experience of cutting 2,500 jobs in 2009. He explained: "This is something I would never ever want anybody to go through again."
Lenders to Peacocks, which was originally formed by Warrington-based businessman Albert Peacock in 1884, brought in the accountants KPMG last month to draw up a plan to improve performance. it reported to Companies House it had made profits of £66.5m in the year to March 2011, but has run into trouble since.
The 200 rumoured closures, out of 611 UK stores and 117 overseas, were being discussed as part of a broad restructuring plan aimed at safeguarding the company's future, Sky News reported, quoting people "close to" Peacocks.
The talks over the future of a business, which also owns almost 400 Bonmarché outlets in Britain, involve a large syndicate of banks led by Barclays and partly state-owned Royal Bank of Scotland.
Another part-nationalised bank, Lloyds Banking Group, sold most of its interest in Peacocks' debt to a firm called Strategic Value Partners several months ago. Goldman Sachs, which is both a lender to and investor in the clothes company, was expected to become Peacocks's biggest shareholder after the debt restructuring.
Deteriorating trading conditions have hit all kinds of retailers, including clothes shops and electrical chains, with consumers cutting their discretionary spending as the cost of energy, food and other essentials have risen.
Blacks Leisure has closed 101 stores in the recent past but this year issued two profit warnings and on Wednesday put itself up for sale.
On the same day electrical retailer, Comet, announced first-half losses of £23m, underlining why its parent group Kesa had recently agreed to hive off the 248 store chain to a business turnaround specialist for a nominal £2.
Last month the American retailer Best Buy said it was pulling out of Britain, while Focus DIY collapsed into administration earlier this year after defaulting on loan payments.
In June furniture store Habitat went into administration before some of its stores and the brand were bought out by Home Retail Group.
And struggling sports retailer JJB Sports narrowly avoided administration three months earlier after agreeing a new deal with landlords and agreeing to close up to 89 of its stores, in addition to the 140 stores it shut in 2009.
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