Over 1,000 jobs at risk after Karen Millen online deal
More than 1,000 jobs could be at risk after fashion firm Boohoo bought the online business of UK brands Karen Millen and Coast for £18.2m.
Boohoo, an online-only retailer, said acquiring the website operations of the two brands “would represent highly complementary additions”.
The firms’ 32 UK High Street stores and 177 concessions, employing 1,100 people, now appear set to close.
Administrators Deloitte said the stores would trade for a “short time”.
It is understood they will continue to trade for months, as opposed to a matter of days.
There will be 62 immediate redundancies, and the future of the remaining workforce remains in doubt while the stores’ future is clarified. Administrators Deloitte said they could not put a date on how long the stores would remain open.
High Street brand Karen Millen had been put up for sale by its Icelandic owners, Kaupthing bank, in June. Both brands were placed into administration on Tuesday and then immediately sold to the online fashion group in a process known as a pre-pack sale.
Joint administrator Rob Harding said: “As we continue to see, the retail trading environment in the UK remains extremely challenging.
“Karen Millen has been seeking to address the financial challenges that it faced by pursuing a sale of the business and, whilst a sale of the whole business has not been deliverable, the Boohoo transaction facilitates the survival of these iconic British brands through an online platform.”
Karen Millen lost £5.7m in 2018 and £11.9m a year before.
Boohoo chief executive John Lyttle said: “The acquisition of the online business of two great and renowned British brands in Karen Millen and Coast represents another milestone in the group’s growth story as it continues to invest in its scalable multi-brand platform and gain further share in the global fashion e-commerce market.”
The firm was founded 14 years ago in Manchester, and has grown rapidly by selling own-brand clothing, shoes, accessories and beauty products. It listed its shares in 2014 and bought the Pretty Little Thing and Nasty Gal brands in 2017.
It has around 13 million active customer accounts globally across its existing brands. Its late morning trade in London its shares were up 3% at 237 pence.
Boohoo and Karen Millen are in very different parts of the fashion market
Richard Lim, chief executive of Retail Economics, said: “It is well known Karen Millen has been struggling in the past few years. But Boohoo will look at it and see another potential revenue stream.
“Karen Millen is a different customer segmentation for them, but one that I think could flourish as an online-only proposition. Boohoo will use all the expertise they have acquired in recent years using social media, and bring the brand to a newer audience.”