Bonmarche has become the latest victim of the high street slump after what administrators described as a “sustained period of challenging trading conditions”.
The firm, which caters for fashion conscious women over 50, has collapsed into administration, putting nearly 3,000 jobs at risk.
The womenswear retailer employs 2,887 staff, including 200 at its Wakefield head office, and operates 318 stores across the UK.
Tony Wright, Alastair Massey and Phil Pierce of specialist advisory firm FRP were appointed as joint administrators for the firm on Friday.
FRP said the company will continue to trade with no immediate job losses, as it assesses options to secure the future of the company.
Mr Wright said that Bonmarche has been a staple on the UK high street for nearly three decades, but the persistent challenges facing retail have taken their toll and led to the administration.
On a brighter note, he said there is every sign that the firm can continue trading while administrators put Bonmarche up for sale. He believes there will be interest to take on the business.
The administrators have promised that all of Bonmarche’s stores will remain open and no redundancies have been made. Yet.
The firm has recently struggled with rising costs, such as business rates and rising wages, as well as dwindling footfall on UK high streets.
Bonmarche’s chief executive Helen Connolly said the high street is going through a period of “historic difficulty” and the firm has been unable to weather the economic headwinds impacting the whole of the retail sector.
This is the second time the company has fallen into administration, after it was previously bought in a rescue deal by a private equity firm in 2012. The company later floated before retail tycoon Philip Day purchased a majority stake earlier this year.
Bonmarche is the latest in a long run of retailers to fall into administration in these turbulent times. House of Fraser, Debenhams, Karen Millen and Coast have all gone into administration over the past two years. Other retailers such as Marks & Spencer have closed stores, often leading to a further slump in high street spending as towns have lost their key M&S store.
Shoppers are holding back on unessential spending until the Brexit fog clears. On top of this, the slump in the pound has raised the cost of clothing imports.
Richard Lim, chief executive at Retail Economics, said Bonmarche is unfortunately another example of a retailer which hasn’t been able to restructure the business fast enough to meet today’s new trading realities.
He said the migration towards online shopping and lower levels of footfall have collided with rising operating costs which has eroded profitability. Put simply, the business model is broken.
He is right when he says that clothing retailers face the brunt of these challenges. Many have too many stores, unsuitable space and can’t pivot their business models fast enough because of inflexible lease structures and years of underinvestment in online.
Bonmarche’s demise will hit other clothing retailers if the firm embarks on a likely discount to get rid of stock. As Mr Lim noted, distressed discounting of stock will hit Bonmarche’s competitors in the all-important run up to Christmas.
Bonmarche’s demise is a great shame as the firm has a unique place on the high street, catering for women who don’t want to go down the “elasticated waist” route.
It caters for women who care about fashion, but don’t want to risk looking like “mutton dressed as lamb”.
It also champions the layered look - lots of layers which can be removed if menopausal women experience hot flushes.
Many women in their fifties, sixties, seventies and eighties feel alienated from society and Bonmarche champions them.
It is to be fervently hoped that a buyer can be found.