600 jobs at risk as clothing chain collapses in UK
More than 600 UK jobs were at risk today after the owner of the Eisenegger discount clothing chain became the latest retailer to collapse this year.
Administrators of Blackpool-based Basebuy, which also owns the Foxhole brand on the high street, said lay-offs were “inevitable” even though they expected to find a buyer for the chain.
Basebuy generates more than £55m (€80.5m) in annual sales from its 70 stores across the UK, but has been badly hit by the slowdown in consumer spending.
Joint administrator Dermot Power, of BDO Stoy Hayward, said the company had also paid the price for its aggressive expansion by opening outlets where rents were sky-high.
He said: “This is another example of how a high fixed cost business cannot adapt quickly enough to rapidly intensifying competition on the high street.”
Mr Power expected bids for the group as Basebuy was a “well managed business which has been trading profitably for a number of years”.
“Over 600 direct jobs are at risk and despite some inevitable redundancies, I am confident a sale of the business should result in job protection,” he said.
Basebuy follows the Allders department stores chain, fashion retailer Pilot Clothing and the Gadget Shop into administration in 2005.
Rhys Williams, of broker Seymour Pierce, expected further high street casualties over the coming months.
“It’s a difficult market out there with underlying costs increasing significantly and consumers tightening their belts on spending,” he said.
Basebuy was carpeted by the Office of Fair Trading (OFT) earlier this year for its tactic of placing large adverts trumpeting “closing down prices - absolutely everything reduced” in its shop windows.
The OFT ruled that the adverts were misleading because shoppers might believe that prices had been cut in order to clear stock before closing down and that mark-downs would only be available for a limited period of time.
Basebuy gave undertakings that the adverts would be pulled and was warned by the OFT that a breach could lead to it seeking a court injunction.
