Deloitte appointed as Links of London administrator
High street jewellery brand Links of London has been placed into administration, putting around 350 jobs at risk if a buyer cannot be found. Matt Smith and Dan Smith, Restructuring Partners at Deloitte, have been appointed to oversee the process.
Averaging 16 closures per day, the first half of 2019 saw a net decrease of 100+ more stores than in the same period of 2018. Worse is expected to come for the beleaguered retail sector as Brexit looms on the horizon. Fashion retail is one of the most prominent victims of the continuing high street slump. The first half of 2019 saw the number of fashion stores in the UK tumble by a net decline of 118, despite registering the largest number of openings of any sector.
The latest victim of the UK consumer crunch is British jeweller Links of London. The brand, founded in 1990, was acquired by the Greek Folli Follie group in 2006, but remains headquartered in London, and sells luxury British jewellery, watches, cufflinks and gifts. The company operates 28 standalone stores across the UK and Ireland and seven concessions, but has had to contend with difficult trading conditions that have impacted the whole retail sector. The brand’s crisis was deepened when it pulled out of the US, and reported pre-tax loss of £20.6m for the year ending December 2017.
Recently the directors had been seeking alternative solutions, including consideration of a CVA, refinancing or sale, but were unable to conclude such a transaction. Earlier in September, Sports Direct was among the final bidders attempting to buy the jewellery brand from the Folli Follie Group, according to reports from Sky News. Mike Ashley was reportedly interested in acquiring the chain as part of his attempt to turn around House of Fraser, which he bought out of administration last year, but a deal failed to materialise.
As a result, Folli Follie Group has appointed Deloitte to oversee the company’s administration – following the Big Four firm’s work on the aforementioned sales process, alongside Savigny. Deloitte Partners Matt Smith and Dan Smith will now look to secure the company’s future, with 350 jobs on the line. While no redundancies have been announced at this stage, this may change if a sale cannot be realised quickly.
Smith said, “In light of ongoing cash flow pressures, this has left the directors with no choice but to place the business into administration. We intend to continue to trade the business and will be exploring any options for a sale. If this cannot be achieved, then we will seek to realise stock and other assets over a period of trading for the benefit of the company’s creditors. The company is well known in its market, having been present on British high streets for almost 30 years. This is not the outcome we hoped for and will of course be difficult news for employees and their families.”
