The womenswear retailer Bonmarche has entered administration to leave its 2,900 employees facing an uncertain future.
For now, the business will be operating as normal while options are assessed, and potential new owners are sought by newly appointed administrators.
There are a total of 318 Bonmarche outlets around the UK, which collectively employ close to 3,000 people, with several hundred staff based at the firm’s head offices in the Yorkshire city of Wakefield.
Helen Connolly, chief executive of Bonmarche, expressed her sense of “deep regret and sadness” at having to put the business into administration but made clear that she didn’t feel confident of being able to demonstrate to shareholders an ability for it to continue as a going concern.
It’s been revealed that a Company Voluntary Arrangement (CVA) deal with landlords and creditors was considered as a potential way forward for the troubled retailer but bosses at the company eventually decided not to pursue that path.
Entering a CVA, which is an increasingly common form of insolvency being used to rescue retail companies, was deemed by Bonmarche’s directors not to be the right option because it would not “fundamentally change the core challenges facing the business,” according to Ms Connolly.
“We have spent a number of months examining our business model and looking for alternatives. But we have been sadly forced to conclude that under the present terms of business, our model simply does not work,” the company’s CEO said in a statement.
Ms Connolly also said that a generally tough trading environment across the country had made life difficult for Bonmarche in recent months and years, which she suggested was in part a result of “the drawn-out Brexit process”.
Among the challenges currently facing British retailers are staff demands for higher wages, the burden of business rates and declines in footfall at high street outlets nationwide.
Retail sector representatives including the British Retail Consortium have long been calling for the government to take action to restrain or reduce the scale of business rates being paid by high street operators like Bonmarche.
The retail sector has seen numerous big names fall into administration in recent quarters, while many others have entered CVAs and closed loss-making stores to avoid the same scenario.