The upmarket fashion chain LK Bennett has collapsed into administration, putting 500 jobs at risk, after its owners failed to find a new financial backer to keep it afloat.
The company, which counts the prime minister and Duchess of Cambridge among its customers, has appointed the accountancy firm EY to manage the administration of its 39 shops.
EY has immediately closed five stores – Brent Cross and Westbourne Grove in London, plus Sheffield, Bristol and Liverpool – resulting in 55 redundancies. It blamed rising business rates and rents for the company’s problems. It was also owed nearly £418,000 by House of Fraser, which went into administration last year in a process also managed by EY.
EY said it was hopeful of finding a buyer for the business and would work to ensure trading would continue and orders fulfilled.
LK Bennett has struggled financially despite its popularity with high-profile women including Theresa May, who wore a blue dress from the chain for a photoshoot in the US edition of Vogue.
The home secretary, Amber Rudd, was accused of being out of touch with ordinary people when she reportedly said at a private business dinner that the application system for EU nationals seeking to remain in the UK after Brexit would be “as easy as setting up an online account at LK Bennett”.
LK Bennett’s customer service telephone line was closed as of Thursday afternoon, while its website carried a holding message reading: “Thank you for visiting LK Bennett, we’re experiencing some issues but should be up and running again soon.”
Its founder, Linda Bennett, who opened her first stores in 1990, emailed staff last week to say she had “fought as hard as I can … to turn the business into the success that I know it deserves to be. These are difficult and unstable times, and we are doing everything we can to identify the best way forward.”
Dan Hurd, a joint administrator at EY, said: “A sale process for the business has commenced. Trading will continue as normal, although web sales will be temporarily suspended to allow the administrators to work with the company’s trading partners.”
It was reported last month that Bennett was casting around for new backers, but last Friday it emerged that the company had filed notice of intention to appoint an administrator.
LK Bennett’s international operations are not part of the administration.
The shadow business secretary, Rebecca Long Bailey, said: “With consumer confidence at an all-time low and high streets quickly becoming ghost towns at the hands of this government, it is no wonder more and more retailers are going under.
“Labour would save our dying high streets with our five-point plan, including fundamental reform of business rates, introducing free wi-fi in town centres, banning ATM charges and post office closures, providing free bus travel for under-25s and establishing a register of empty properties.’’
