Designer Childrenswear files for administration

Family-owned retailer Designer Childrenswear has fallen into administration, becoming yet another UK-based name to fall victim to the cost-of-living crisis that continues to grip the nation.

Andrew Haslam and Allan Kelly, partners of FRP Advisory, have been appointed joint administrators of the case, according to filings with the region’s Companies House.

Founded in 2013, the Newcastle-based company had faced a series of operational and financial challenges over the past few years, with issues largely coming to light following the introduction of a new website in 2022, which led to the company being offline for Black Friday resulting in an estimated loss of one million pounds.

As such, Designer Childrenswear said it was unable to place and pay for sufficient future orders, causing a cash decline, reduced stock levels and a fall in profitability.

The company was later unable to meet payment dates with its main clothing suppliers, only continuing to trade up until November 10, 2023, when it fulfilled shop and online orders.

Profit had already taken a heavy hit in 2021, however, dropping from 232,000 pounds in the previous year to 20,000 pounds. In 2022, net profit rose to 64,000 pounds, while turnover came to 5.3 million.

FRP came into the picture after directors failed to secure new financing or a takeover deal, with only the sale of certain assets being secured for a lacklustre 100,000 pounds.

In light of the loss-making financial position Designer Childrenswear is in, Haslam said that a better result for creditors “would be likely if the company were wound up (without first being in administration)”.