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Officers Club in administration

By FashionUnited

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Fashion

Menswear retailer Officers Club is in administration for the second time in just over two years, leaving hundreds of jobs hanging by a thread. The 106-store chain will close half of its portfolio as it secured a rescue deal with Blue Inc,

the fast-growing menswear retailer, to buy 50 of Officers Club's stores out of administration.

Officers Club, which is based in Northumberland, first collapsed in December 2008. The chain and its Petroleum brand format were subsequently bought out of administration by its founder and chief executive Dave Charlton, although he offloaded 32 of its 150 shops. If it should fail again this week, it is unknown if Mr Charlton will try to buy the company back for a second time.

It is unclear why Officers Club is on the brink of administration, but a lack of credit insurance and its second-quarter rent bill – which was due on Friday – may be contributing factors. Suppliers to Officers Club, like other retailers previously in administration, will have struggled to get trade credit insurance over recent years.

Joe McLean, one of the administrators, said: "The company experienced particularly challenging trading conditions in 2010 with raw material costs rising significantly. It was not possible to pass these increases on to customers given the extremely price-sensitive nature of the UK retail arena."

"The directors did not see any improvement forthcoming in the early months of 2011 and, mindful of their legal responsibilities, concluded reluctantly that administration was in the best interests of the company's creditors and other stakeholders."

Many retailers have been hit by low footfall and tough trading so far this year, which means they have not been able to recover from a shortfall in festive sales due to the dire snowfall before Christmas.

Blue Inc, which currently owns 99 shops, would grow its market share substantially in one fell swoop with the acquisition.

Blue Inc has grown its store numbers rapidly from 28 since it was bought out in 2006. The menswear retailer had been considering a float of the business this year, but these plans are thought to have been pushed back until next year. Like-for-like sales at Blue Inc rose by 1.7 per cent over the two weeks to 31 December.

Image: Officers Club
Administration
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