Less than a week into the new year Bank Fashion — sold in November by JD Sports — has become the first retail casualty of 2015.
weeks after it was sold by the North West sports chain to a turnaround specialist subsidiary of Hilco, the retailer has now been placed in the hands of accountants Deloitte. It’s understood JD Sports passed on the loss-making retailer for just £1.
Founded 20 years ago by former Macclesfield Town footballer, Andy Scott, Bank has 84 stores — mainly in the Midlands, north of England and Scotland. Its headquarters are still listed at the JD Sports offices in Bury, although Hilco is headquartered in London. Bank has 1,555 employees, but no redundancies have yet been announced and the stores will continue to trade.
“All stores are open as normal, staff have been paid and additional sale discounts will be implemented later this week,” explained joint administrator, Bill Dawson.
“The company has already been approached by several parties who have expressed an interest in the business and the administrators are trading as a going concern with a view to progressing these options and seeking further interested parties for some or all of the business.”
Commenting on the closure, he said: “Bank has struggled in a highly competitive segment of the retail industry and has been loss-making for a number of years. A review of the business has determined that a solvent turnaround would not be possible and so its director has sought the appointment of joint administrators.”
Bank has not returned a profit for several years and in the twelve months ending in January, 2014, it posted a pre-tax loss of £8.1m, with assets of £51.7m. Hilco, which also owns HMV and Habitat, appointed an independent restructuring officer to draw up plans for a turnaround soon after its acquisition, but decided the company could not be saved without restructuring.
Richard Hyman is an independent retail analyst who feels the collapse of Bank could be the first in a flood of casualties this year through an overcapacity in the competitive clothing retail market. “The apparel markets in the UK are the toughest in the world, and you have to be more than good to make a living,” he said.
The fashion chain’s demise comes as the UK retail sector prepares to report sales for the crucial Christmas trading period. Argos, Marks and Spencer and Tesco will reveal trading figures in the next two weeks. On Monday John Lewis showed sales peaking on Black Friday, with the heavy discounting weekend at the end of November pulling sales forward from Christmas.
