The Barratts Priceless Group, which operates 191 Barratts and Priceless Shoes shops and 371 shoe concessions across the U.K. and Ireland, went into the equivalent of Chapter 11 bankruptcy on Dec. 8. Just before Christmas, the company's court-appointed administrators from Deloitte closed down five Barratts and 13 Priceless stores, dismissing 170 out of the 3,840 employees within the group. They are looking for new investors to take over the whole business or parts of it.
Deloitte blamed the difficult trading conditions in the U.K. market, which were exacerbated by an unseasonably mild weather in the weeks prior to the decision to seek bankruptcy protection. As a business consultant, Deloitte has already predicted that this year's pre-Christmas sales across the British retail sector would have been flat at best, except for e-commerce, and that no improvement was in sight until 2013.
Deloitte said the administrators of Barratts Priceless were working closely with suppliers to ensure that the business has the best possible platform for a sale, preserving jobs and generating revenues for all the creditors concerned.
It is the second time that the group has fallen into judicial administration. Previously called Stylo, it filed for bankruptcy protection in February 2009. A few weeks alter, its chairman and chief executive, Michael Ziff, bought out 160 stores and 165 Dorothy Perkins concessions employing a total of 3,000 people, but 220 other stores had to be closed down, resulting in 2,500 job losses. Ziff's family owned a 65 percent stake in Stylo.
The bankruptcy highlights the dire straits that the retail sector is going through in the U.K. The directors of Blacks Leisure Group, a retailer of outdoor products trading under the Blacks Outdoor and Millets banners, put up the company for sale at the beginning of December but failed to find a buyer, opening the door for a possible pre-packaged form of bankruptcy (more in our Outdoor Industry Compass).
According to R3, a British insolvency specialist quoted by Just-Style, 60 percent of the retailers in the U.K. are experiencing declining profits and almost half have endured a sales decline recently. Market research has shown that more and more British consumers are buying shoes in the fashion boutiques, but some shoe retailers such as Dune and Office are still doing well.