Jane Norman shops in administration
Published 27/06/2011 | 10:52
Women's fashion firm Jane Norman has fallen into administration in a move which could put up to 1,600 jobs at risk.
Accountancy firm Zolfo Cooper hopes to find a buyer for the stricken retailer, which closed its 90 stores on Saturday.
Media reports have suggested that Jane Norman could be sold imminently in a so-called pre-pack administration deal, with department store chain Debenhams and knitwear firm Edinburgh Woollen Mill reported to be among the potential bidders.
Pre-pack administrations are controversial because creditors, such as suppliers, can lose out as some of the debts are scrapped.
Jane Norman, which specialises in selling to women between the ages of 16 and 25, is the latest retail victim of the squeeze in consumer spending brought about the financial crisis.
Habitat's UK shops outside London and Homeform, the owner of Dolphin bathrooms and Moben kitchens, were put into administration last week. Mothercare, Comet and HMV are among retailers closing stores.
The retailer, which also has around 100 concessions within department stores including Debenhams, is understood to have asked its landlords last week to defer its rent payments as its quarterly payments deadline loomed.
The company, founded in London in 1952, has failed to find a buyer in recent weeks but putting the company into administration may speed up the sale process because some of its £140 million debts could be scrapped.
Jane Norman has been squeezed in recent months as cash-strapped consumers put off non-essential purchases and consumer confidence plunged amid fears over the strength of the economic recovery.
Clothes have also become more expensive as raw materials such as cotton have soared in price, and VAT rose to 20% from 17.5% in January. Debenhams, which operates most of the Jane Norman concessions, could be interested in buying the stock and brand.