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Coast enters into administration after taking hit from House of Fraser collapse

Karen Millen has bought some parts of Coast, including the brand’s website and UK department store concessions

Coast
Coast was owned by Oasis and Warehouse owner Aurora fashion

Women’s fashion retailer Coast has entered administration after taking a hit following the collapse of concession partner House of Fraser.    

Karen Millen has bought some parts of the business, including the brand’s website and UK department store concessions. However, all 24 standalone Coast stores and European concessions will close.

Coast had concessions in House of Fraser and was owned millions after the department store collapsed earlier this year.

Sports Direct International PLC (LON:SPD) took over House of Fraser just hours after the chain went into administration in August with debts of close to £1bn. 

READ: Harrods of the High Street: Ashley's ambition as Sports Direct grabs House of Fraser for £90mln

Coast, which also has several concessions in struggling department store Debenhams PLC (LON:DEB), has appointed PwC as administrator.

PwC joint administrator and director Mike Denny said: "The businesses had been facing financial difficulties due to structural challenges in the retail space and specifically the concession partner market, as well as a softening of demand for occasion wear.

“This sale puts the ongoing business on a firmer financial footing. Karen Millen will be working with the existing management team to continue to grow and develop the new business.

“Regrettably, other parts of the business including 24 retail stores were not included in the transaction. We will make every effort to help those employees in parts of the business that were not included in the sale and will support those affected at this difficult time by liaising with the Redundancy Payments Service and Job Centre Plus.”

Coast was owned by Oasis and Warehouse owner Aurora fashion. Karen Millen is owned by Icelandic bank Kaupthing, which controls Aurora.

READ: Patisserie Valerie faces closure if it can’t find a fresh injection of cash

High street retailers have come under increasing pressure from weak consumer confidence and online competition, leading to the demise of a number of chains including Maplin and Toys R Us.

Other retailers including Debenhams, New Look, Mothercare plc (LON:MTC), Homebase and Marks & Spencer Group PLC (LON:MKS) have had to close stores to cut costs following sluggish sales.

On Thursday cake chain Patisserie Valerie Holdings PLC (LON:CAKE) said it needed “an immediate injection of capital” if it is to stay afloat a day after suspending its shares and its chief financial officer while it investigated “significant, and potentially fraudulent, accounting irregularities”.

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