Owners of Store Twenty One race to avoid administration

The owners of Welsh budget fashion chain Store Twenty One are at the race to find a lifeline for the business as an administrators' hearing gets closer. The hearing will be held in eight weeks.

Amidst a wave of store closures and layoffs at the British high street – BHS and Austin Reeds are currently in the eye of the storm –, bosses at Store Twenty One are looking to exhaust all possible ways to find viability for the business before calling in the administrators.

As reported by local media, current management of the retailer is said to be exploring all options for the company, from a possible sale, attracting fresh investment, a debt for equity swap or a Company Voluntary Arrangement (CVA).

Store Twenty One to fall into administration on August 11

The chain, which has around 200 stores and employs more than 1,000 staff across the UK, is expected to fall into administration at a court hearing on August 11 if a solution cannot be found, highlights the ‘Daily Post’.

With a view to find an alternative, the company has appointed restructuring experts AlixPartners.

Controlled by Indian manufacturing giant Alok Group, Store Twenty One has tried to alleviate the tougher than ever conditions for its business by closing 10 loss-making stores and opened 38 new ones between 2014 and 2015. To date, the retailer has stores in Colwyn Bay, Llandudno, Wrexham, Pwllheli, Rhyl and Holyhead.

As published by the ‘Belfast Telegraph’ and according to its latest accounts on Companies House, the firm recorded a pre-tax loss of 6.7 million pounds in the year to March, 28 last year, compared to a loss of 9.9 million pounds the year before.

In contrast, the fashion firm enjoyed a jump in turnover, which went from 89.4 million pounds in 2014 to 92.2 million pounds by the end of fiscal year 2015.

After rebranding as QS in 1987, the retailer floated on the London Stock Exchange in 1990 and expanded into the Midlands and North of England. In 2002 a group of investors set up Hamsard 2353 Ltd to purchase the entire share capital of the company for 15.8 million pounds and returned it to private ownership.

It was bought by Alok in 2007, after coming under pressure for the first time in 2006, when it was still called QS. Back then, it was enough to close about 140 shops and invest heavily in a rebrand to become Store Twenty One.

In 2013 it sought rent reductions from landlords and bailiffs were called in to a number of its shops, recalls ‘Retail Gazette’.

Image: http://www.storetwentyone.co.uk