Credit, Collections & Insolvency News
Oasis and Warehouse have fallen into administration, with over 202 jobs lost. A further 1,800 employees will be furloughed as the Oasis, Warehouse and Idle Man brands continue to trade online in the short-term.
The company operated 90 standalone stores and more than 400 concessions in department stores. Icelandic bank Kaupthing, which owned the business, had been seeking a new investor to take on the fashion chains, and at least two prospective buyers are thought to have come forward, but a deal was not completed before the administration
Commenting on the administration, Dr Gordon Fletcher of the University of Salford Business School said “As high street fashion retailers, Oasis and Warehouse have been squeezed from multiple directions in the last few years. The successful rise of the online fashion retailers, such as Boohoo, that can bring fast fashion to customers even faster is a well-documented and significant challenge. The fact that Boohoo had also previously rescued competing traditional outlets Coast and Karen Millen made that squeeze even tighter. Being controlled by the troubled Icelandic bank Kaupthing is a further underlying structural issue that has made that squeeze feel even tighter.
“The current health emergency has brought another unexpected pressure. Despite its name, fast fashion does have long lead times and supply chains that stretch around the world. This form of operation still brings containers of clothing to warehouses but now without the opportunity to put the goods in front of consumers. With no footfall on the high street the single distinguishing feature between the high street and online retailers has instantly disappeared.”
“COVID-19 is not the sole cause for this most recent administration announcements. However, the health situation is accelerating negative changes in the business world with its impact being felt in terms of weeks rather than months. Unfortunately, while many businesses are pivoting to new business models, any positive improvements will take longer to be realised.”
Joel Kempson, Personal Finance expert at money.co.uk said “Oasis and Warehouse join a growing list of businesses pushed to breaking point by Covid-19. The pandemic has already caused major household names like Flybe, Debenhams, Laura Ashley, Carluccios and Brighthouse to collapse.”
“Oasis and Warehouse have battled on throughout difficult high street trading conditions, even posting record sales figures in 2019, but with the closure of stores and added strain of COVID-19 the administrators have been called in.”
“While the future looks uncertain for its 2,300 employees, many should benefit from the Coronavirus Job Retention Scheme following the landmark High Court ruling. This will pay employees 80% of their wage while the company looks for a buyer.”