Fears mount of Oasis, Coast and Warehouse store closures under new owners
With turnaround specialists Endless and Alteri reportedly hoping to buy Aurora Fashion Group, there are fears that its three chains - Oasis, Warehouse and Coast - could see mass store closures after a deal is done.
The chains have been up for sale since last autumn and accountancy firm PwC, which is handling the sale, received preliminary bids last week. But given the tough times for UK physical stores and the general move of the UK consumer online, it’s likely that there will be large numbers of stores on the closure list.
Warehouse is seen as being particularly at risk as the chain, which has been reinventing itself with a much higher trend focus, was lossmaking in the last year for which accounts are available. It lost £1.3m. Oasis was profitable (£6.3m) but profits were flat, while Coast saw an earnings increase, turning its fortunes around from a £10.8m pre-tax loss to a profit of £1.3m.
The concerns come as the saga of Iceland’s financial crisis last decade continues to play out on UK high streets. The chains had been owned by Mosaic Fashions, which was swept up in the crisis that engulfed its backers, investment firm Baugur and Icelandic bank Kaupthing. Aurora is now controlled by the administrators of Kaupthing.
Sources told The Telegraph that if either Endless or Alteri won the race for the trio, both would be likely to shut stores. But how many would they close lossmaking sites would clearly be highest on the list but profitable stores are also potentially at risk as the companies would look to maximise productivity from omnichannel operations with a large store estate no longer seen as crucial for achieving strong sales. That could mean some flagships on key shopping streets being shuttered.
And what of the potential new owners? Alteri is not afraid to take tough decisions and was recently in the news after its exited Brantano and Jones Bootmaker, both of which have seen a raft of store closures.
Meanwhile Endless is known to be acquisition-hungry with the Bathstore owner recently buying Arran Aromatics and having acquired Jones Bootmaker at the 11th hour before an administration filing. It closed over 30 if its stores.
The newspaper said up to 5,000 people are employed by Oasis, Coast and Warehouse, which means the the stakes are high for the UK fashion retail sector employment scene.
There has also been speculation that the group could be broken up after acquisitions with individual chains separated out, although this could complicate things as the three share one head office.
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