Barratts and PriceLess, subsidiaries of Stylo Plc, which suspended share trading today, are the latest British shoe chains to fall victim to the downturn.
It was announced that the British shoe chains, which between them employ 5,450 staff and operate 400 High Street stores across the U.K., have appointed Deloitte as administrators.
However, the stores will continue to trade following a statement announcing that advisors to the business made an arrangement by which the administrators will propose Company Voluntary Arrangements to the creditors of each of the subsidiaries in administration.
“This is the equivalent of Chapter 11 in the U.S.,” explained George Wallace of U.K.-based retail specialist MHE Retail. He said the arrangement is meant to protect creditors and will allow the company to trade or restructure its way out of difficulties — assuming it can get majority creditor approval first. “They’ve been hanging on for a year and were already struggling in January 2008 when Dolcis went under,” he added. “They’re in a hard space to be in. New Look is the No. 1 volume shoe player in the U.K., and they are selling better fashion at better prices.”
Barratts focuses on the better end of the business, selling a mix of private label and branded men’s, women’s and children’s shoes, including brands such as Skechers, Rocket Dog, Caterpillar, Hush Puppies and Dr. Martens.
According to sources, the company already has support from Prudential, Lloyds Group and Barclays for the restructuring process.