The owner of Supercuts hair salons has become the latest high street casualty, with its failure putting another 1,200 jobs at risk following the loss of 85,000 retail jobs in the past year.
Its parent, Regis UK, appointed administrators in a decision that casts doubt over the future of its 220 salons and large workforce. The shops are expected to trade as normal for the time being while Deloitte, the advisory firm, explores options for the business.
Supercuts’s failure follows last week’s collapse of Bonmarché, the fashion chain for over-50s, which employed nearly 3,000 staff. Other recent failures include Karen Millen and Coast, which closed all their stores. The Jessops camera chain, which is owned by Dragons’ Den star Peter Jones, is also on the brink of administration. However, retail industry sources told Sky News that they expected a buyer to be found for the Supercuts chain.
The heavy job losses are the fall out from a high-street crisis that has seen the closure of thousands of shops and well-known retail names disappear. While many of the job cuts are the result of closures, thousands are also down to cutbacks, as retailers offset cost increases caused by the rise in the legal minimum wage and the apprenticeship levy, higher business rates and an increase in the cost of goods as a result of the Brexit-led fall in the value of the pound.
It became apparent that Regis was struggling last year when it embarked on a restructuring process called a company voluntary arrangement plan to slash its rent bill. The drastic plan – which included asking the owners of more than 20 of its salons for free rent – was unpopular with landlords, including British Land and Hammerson, which mounted a legal challenge to overturn it.
The property trade body, Revo, last year described it as a landmark case amid “grave” concerns that the CVA process was being abused by some retailers to close loss-making stores. It is not clear what impact the administration will have on the court case.
In 2017, Regis UK was sold by its American parent to global salons operator the Beautiful Group, which is backed by Los Angeles private equity firm Regent. Its most recent accounts show the business making a loss of £5m on sales of £65m in 2017. In its CVA proposal, Regis UK said that a “perfect storm” of factors, such as declining footfall and higher wage costs, had hurt the business leading to “cash flow issues”.
