KRE Corporate Recovery oversees Mahabis administration
Luxury slipper brand Mahabis has collapsed into administration following poor seasonal trading and a heavy debt burden, according to reports in the British press. The firm’s administration is being overseen by KRE Corporate Recovery, who will now search for a buyer to continue trading as quickly as possible.
Launched four years ago, clothing retailer Mahabis has sold roughly a million pairs of slippers across more than 100 countries. The distinctive, Scandinavian-style shoes were priced around £70, and the company targeted Millennials through social media, pop-up ads and email discount offers to propel sales to £1.5 million worth of footwear in its first year, £10 million in its second, and over £20 million last year.
Until recently, the brand was estimated to be worth around £75 million – £100 million; however, the footwear company is thought to have owed creditors £2.6 million in the 12 months to June 2017. Assuming this situation did not improve, a slow festive trading period in 2018 seems to have caused the collapse of Mahabis. Poor Christmas sales figures had similarly done for entertainment retailer HMV, and Mahabis likewise called in administrators just days after Christmas.
This suggests the brand is the latest debt-burdened consumer company to be hit by the UK’s difficult trading environment, with others including Toys R Us and Poundworld. A potent blend of spiralling debts, climbing business rates, and crippling costs related to a weakened pound triggered by Brexit have seen multiple casualties in the British leisure and retail scene throughout the year, with no end in sight.
In a statement on its website, the company said, “Unfortunately, we are very sorry to report that Mahabis Limited entered administration. We have, for the moment, ceased trading as the administrators take over the business… We are all desperately disappointed at this outcome.”
Mahabis has appointed administrators from KRE Corporate Recovery, ceasing trading while the administration is underway. Customers who want to return recently bought footwear from Mahabis have meanwhile been told not to expect a full refund, with the group stating it is “very likely” customers would not receive a full refund, while any such payment would likely “take many months.”
KRE Corporate Recovery said in a statement, “The administrators have retained the Company’s workforce whilst a purchaser of the business and assets is sought and they hope this process can be concluded in the next 14 days. Several parties have indicated a strong interest in acquiring the business and management, and the administrators are all hopeful that the business can be sold and continue early in the New Year.”
