Losses force fashion chain to shut 14 shops and cut 80 jobs
Firm operating Vero Moda put in examinership as high rents blamed for difficulties
Published 27/02/2010 | 05:00
THE Irish company behind Vero Moda and Jack & Jones has gone into examinership and is closing 14 of its fashion stores, citing the "very challenging trading environment".
The move will trigger up to 80 imminent job losses at Bestseller Retail (Ireland), which also operates Ireland's Only and Name It stores. Another 190 jobs are at risk at the company's remaining 24 stores.
The court-supervised examinership process gives Bestseller up to 100 days to strike a deal with creditors and/or secure fresh investment so the business can trade solvently.
Bestseller Retail (Ireland) general manager Lucy O'Mahoney yesterday said the company was "confident" that it would emerge from examinership "in a strong position to face the future".
She added that the Irish operation had the "support" of its Danish parent company, and a spokesman confirmed the parent was willing to invest more cash as part of the examinership process.
The most recent accounts for it show the Danes already stumped up another €2.5m for the loss-making Irish company in 2008, bringing their total investment in the Irish operation to €4.5m.
Ms O'Mahoney said that Bestseller would use the examinership period to negotiate with all its landlords to "secure more realistic rental levels", blaming a "steady increase in rents across all our stores" for the business's difficulties.
Bestseller has been operating in the Irish market since 1991, building up a network of 36 stores that stretches from Cork to Sligo to Waterford to Dublin.
The company's most recent financial filings show losses of almost €1.4m in the year to July 2008 on a turnover of almost €28.5m.
Signing off those filings at the end of 2008, Bestseller's directors said the biggest risk to its Irish business was "loss of revenue and customers" and "increasing rental charges and salary costs".
Ms O'Mahoney yesterday stressed that the decision to go into examinership was made only after "examining all our options over the past 12 months" and that closing the stores was "not a decision we have taken lightly".
A company spokesman said that Bestseller expected that the closures announced yesterday, which covered the worst performing stores, would leave the company "in a solid position to return to profitability".
The stores being closed include 10 Vero Moda outlets, three Jack & Jones and one Name It.