Firms who are in trouble may find they are in good company after the administrator of Barratts Shoes was unable to find a buyer.
Deloitte has announced over 1,600 jobs are to go at the firm’s stores in the UK and Ireland after it took control of the company’s affairs last month.
“Following a marketing of the Barratts Priceless business it is clear that a satisfactory sale of the concession to a new party will not be achieved.
“Accordingly, the joint administrators have regretfully had to make approximately 1,610 Barratts Priceless group full and part time employees working in the various concessions redundant.”
It is the second time since the start of the economic downturn that the firm has had to use insolvency services, indicating that the company has had ongoing problems in a section of the marketplace where purchasing activity may have been reduced as consumers concentrate more on essentials than buying fashion items.
Small firms who run into trouble may find they are suffering from similar problems, as their products and services depend on attracting a large volume of discretionary spending at a time when many consumer incomes are squeezed.
And with Christmas having just passed, many more firms could find they are struggling due to reduced consumer spending at a time of austerity.
Toy store Hawkin’s Bazaar has become one of the first to suffer such a fate, calling in administrators on December 30th.
And joint administrator Peter Saville of Zolfo Cooper has subsequently announced 40 retail units and six concession stores are to be sold, with 302 retail jobs lost plus another 35 at the company’s Suffolk offices, leaving 25 stores left.
Mr Saville said: “It is clear from our analysis that a significant portion of the Hawkin’s Bazaar estate is not viable in today’s exceptionally challenging retail environment.”
Companies in a similar situation may benefit from seeking help as soon as they can.