Written by: Keith Tully
Published: 26th June 2015
The women’s fashion retailer East has been rescued through a pre-pack administration process but the business has nonetheless been forced to shed around 155 jobs and close a number of stores around the country.
East was taken into administration in recent days but was immediately bought by East Lifestyle Limited, a company believed to have been created by Fabindia, which has been a majority shareholder of East since 2012.
A total of 19 stores are to be closed in various parts of the UK as East looks to secure a more sustainable future, Retail Week reports.
Although dozens of people are to lose their jobs as a result of the pre-pack administration, more than 550 East employees will remain in their posts as 82 UK stores are to be kept open.
“East Limited had suffered losses in the past few years due to the continuing difficult economic climate and also the shift in consumer spending to different channels away from the traditional high street stores,” administrators have said.
“The restructuring process has resulted in the continuation of viable stores and the safeguarding of the majority of the employees and ensures that the business is financially secure for future trading.”
A spokesperson for East announced that the business will continue to operate under the same management team after successfully finding a buyer for its operations and assets.
“The sale follows a vigorous bidding process that included a number of private equity firms and secures a sustainable future for the brand,” statements from the company explained.
East’s losses were worth more than £700,000 in the year to the end of March 2014, with turnover during that period having fallen by around two per cent compared with the year before.
The company’s website was able to operate as normal throughout the process of its entering administration and being bought by the newly-created East Lifestyle Limited.
Fabindia is an international clothing and home furnishings retailer headquartered in the Indian city of Delhi. On its English language website, it describes East as being a partner company “known for its range of contemporary styles with an individual twist”.