One of Britain’s iconic tailoring brand Austin Reed has collapsed into administration, or insolvency, putting more than 1,000 jobs at risk.
According to a PTI report: The 116-year-old tailoring brand, which once counted former British Prime Minister Winston Churchill and Elizabeth Taylor among its customers, appointed AlixPartners to explore options for the business after it ran out of cash.
It becomes the second high street retailer in two days to appoint administrators after British Home Store (BHS) suffered the same fate, leaving 11,000 jobs hanging in balance.
AlixPartners said the retailer would continue to trade while it explored possible options to secure a future for Austin Reed, including a sale of all or parts of the business. Our priority now is to work with all stakeholders and determine the optimum route forward for the business as we continue to serve customers throughout the UK and Ireland.
“Austin Reed is a well-regarded and iconic brand, and therefore we are confident that it is an attractive proposition for a range of potential buyers; as such, we expect, and welcome, contact from interested third parties,” Joint Administrator Peter Saville was quoted by The Guardian as saying.
The Austin Reed Group, which includes the Country Casuals brand, has 100 standalone stores and 50 concessions throughout the UK and Ireland. It employs a total of 1,184 staff.
According to a report in Sky News: Sources said that Better Capital, the private equity firm headed by veteran investor Jon Moulton, was among the parties likely to be sounded out about a rescue of Austin Reed in the coming days.
Better already owns Jaeger, another fashion chain, and could be tempted to combine a restructured and slimmed-down Austin Reed with its existing retail interests, although the likelihood of such a move is unclear.
In the year 1900, Savile Row with its bespoke suiting had taken over all the quality clients. It was then that 27-year-old Austin Leonard Reed, an outfitter, saw the gap in the market for quality tailoring that could be bought off-the-rack. He set up shop in Fenchurch Street and became the first menswear retailer to sell ready-to-wear suiting at the same quality as made-to-measure.
Eleven years later, Austin Reed opened its flagship store on Regent Street, where it was to stay for the next 100 years.
However, not keeping abreast of the changes and evolving customer demands over the years, started leading to an inevitable decline. The brand had not even managed to keep up with online sales or more cutting edge fashions that other – more affordable – brands like Hugo Boss were offering. The crash had begun.
Last year, its owner Darius Capital agreed a company voluntary arrangement (CVA), which allowed the insolvent company to continue trading while taking steps to reduce its debts. The retail group secured a three-year loan from Alteri Investors, which earlier this year bought out the rest of Austin Reed.
Soon after, Austin Reed was forced to shut down 31 stores, but that didn’t stop the pre-tax losses to reach a mammoth figure of £5.4m. Sales fell by 8pc to £100m, and the brand saw almost a 4pc decline in 2015. Ultimately, the 116-year-old business on Tuesday became the latest high street stalwart to collapse into administration.