Signalling the rising woes of legacy apparel retailers, century-old British menswear brand Austin Reed has announced appointing administrators for possible sale or liquidation, risking 1,200 jobs.
The company had been making several efforts to handle the cash crunch. But the stitch in time has not helped the 116-year-old business, which is the second high street stalwart facing collapse after BHS.
In a statement, the administrators cited “challenging retail market” and “cash flow difficulties” as the company’s ills.
Recently, Austin Reed was taken over by retail specialists Alteri Investors for an undisclosed sum. However, the firm found the going tough and announced administrators saying that Austin Reed is a going “concern.”
“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,” said Saville of Alix Partners.
If the administrators fail to locate a buyer, then Austin Reed will be liquidated to raise cash to pay the creditors.
The brand’s founder, Austin Reed, began his historic journey in 1900 as a tailor and Winston Churchill was said to be one of his customers, reports BBC.
It later set up shop in Fenchurch Street as the first menswear retailer selling ready-to-wear items. In 1911, Austin Reed opened the flagship store at 113 Regent Street where it stayed for more than 100 years.
Rising competition has beaten the brand considerably. It has more than 100 standalone stores and owns women’s wear brands CC and Viyella.
The brand began shutting down unviable shops in the past couple of years. Despite closing 31 shops, Austin Reed’s losses (as of the end of January 2015) zoomed to $10.3 million from $2.29 million a year before.
Sales fell by a drastic 8 percent, from the 4 percent in the previous year. Reflecting on the brand’s lag in sales, retail expert Professor Chris Edger said: “Austin Reed is not perceived as trendy. It’s not even where your father went – it’s where your grandfather went.”
He called the retailer a legacy business whose heyday is gone. It belonged to the 1950s, 60s, and early 70s and is now undone by upstart rivals who chased high fashion.
A report in The Telegraph also traced the retailer’s struggle in keeping pace with the changing high street as savvy consumers are shifting to branded suits from Hugo Boss and seeking more affordable options at stores like Marks and Spencer.