Friday, 9 August 2019

Karen Millen and Coast the latest High Street Casualties

In April 2017 we reviewed the story of Karen Millen, who had built her fashion brand into a 130-store chain before being declared bankrupt because of an unpaid tax bill. The brand, which was bought from Millen in 2004 by an Icelandic company before being transferred to Aurora Fashions in 2011, has been long regarded as a quality outlet on the British high street. However, with the seemingly-relentless demise of the traditional British high street, it appears there are about to be two more casualties.

In 2018 Karen Millen, owned by Aurora – who are ultimately owned by the Icelandic Kaupthing Bank – acquired certain parts of Coast, a competing fashion retailer who were launched in 1996 and grew to have almost 20 stand-alone stores in the UK. As Coast were in administration, Karen Millen were able to acquire certain parts of the Coast’s concession and online portfolio, saving 600 jobs in the process. However, it was confirmed this week that Karen Millen and Coast have been put into administration and, through a process known as a ‘pre-pack’, the businesses have already been sold. Yet, rather than another company taking on the brands and therefore the jobs associated with the two brands, the buyer is online retailer Boohoo. Boohoo are a Manchester-based online-retailer and have grown in prominence recently thanks to a concerted marketing approach aimed at younger generations, alongside a very successful media campaign that has seen the firm become synonymous with popular programmes such as ITV’s Love Island. Boohoo have purchased the online businesses of Karen Millen and Coast for £18.2 million, in a move which all but ends the existence of the two brands on the British high street and puts more than 1000 jobs at risk. Whilst the two brands have been losing money in recent years, Boohoo are optimistic that an addition to their revenue stream, in terms of opening up their business to a different clientele, will bear fruit soon enough.

Karen Millen has said that she is ‘deeply saddened to this think that this may be the end to the visible presence of the stores’, but this move is, of course, just the latest in a long line of store closures on the high street. The footwear store Office is due to close half of its stores in the UK, which number at more than 100. Boots has announced that there will be more than 200 closures from its extensive network. Furthermore, in terms of job losses, Tesco announced this week that more than 4,500 jobs across the country will be axed, with the store baling changing consumer shopping habits. It appears there are a whole host of factors that are affecting the health of the high street, but there are very few solutions in sight. The prominence of online-only retailers, the need for austerity-battered British consumers to conserve their finances, and uncertainty about the economic future of the country are all coalescing into a storm of problems for high street retailers. There will be more updates from the blog in the near future regarding store closures, regrettably.

Keywords – UK, high street, Karen Millen, Boohoo, business, @finregmatters

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