The first casualties of the economic slowdown are emerging. Toys
cataloguer/retailer Tridias fell into administration, as did shoe
retailer Dolcis, though both companies quickly found buyers-a
former consultant acquired the assets of Tridias, and Stylo, the
parent company of competitor Barratts bought Dolcis. At apparel
cataloguer/retailer Travelling Light, however, the phone lines
are closed, the website has been disabled, and the staff have
been sent redundancy notices. Two other retailers, women’s
fashion merchant Elvi and Base Menswear, also in administration,
are trying to focus on business as usual.
Turning around Tridias
Michelle Follett-Holt, who had been working for Tridias as a consultant since summer 2007, acquired the company’s assets after it appointed recovery and insolvency firm Rogers Evans on 6th February. Those assets include the customer database, the website, the trading name and any stock that is not claimed by creditors. The staff had been made redundant before the adminstrators were appointed. Tridias had sold four of its stores last year, retaining only its flagship shop in Bath. Although she couldn’t specify why Tridias had failed, Follett-Holt said that the company had had a “tough four or five years”.
Follett-Holt said she was committed to honouring customers’ refunds. Fulfilment firm Clientbase, she added, will remain a key vendor: “They’ve been fantastic over the past the very difficult couple of weeks,” she said.
Although the company will retain the Tridias brand name for the time being, Follett-Holt will gradually phase in a new one. What won’t change, she said, is “the core ideals of good quality toys”.
Travelling Light out
The mail order and retail businesses of the Cumbria-based firm and sister company Active Travel Apparel had previously fallen into administration this past June, due to declining sales amid increased competition from overseas. OR Clothing Company Ltd bought them shortly thereafter, retaining Travelling Light’s headquarters, warehouse and seven stores along with 45 of its 105 employees. OR Clothing’s directors include Peter Fitzpatrick, a former director at failed menswear retail chain Ciro Citterio, and Surjeet Khela, the founder of womenswear chain Bon Marche.
But Travelling Light failed under the new ownership as well. Catalogue/e-business obtained the name of the insolvency specialists said to be handling the case, but when contacted in mid-February, the company said it had not officially been appointed and declined to comment further.
Freddy Markham, who founded Travelling Light 20 years ago with his wife, Suzie, and who owned it until just prior to its failure in June, still owns the warehouse and call centre from which Travelling Light operated. He told Catalogue/e-business that the new owners had not been paying the rents: “As a result several landlords have reclaimed their premises including [storefronts in] London, Malmesbury, Chalfont St Giles and Morland and the warehouse near Morland.” Markham also said that staff had not been paid “for weeks” and were issued redundancy letters without the necessary notice period. At press time two stores were still operating, however.
Online success couldn’t save Elvi
Elvi, the plus-size women’s fashion retailer, is up for sale, having gone into administration on 11th February. The company’s difficulties surprised many, given that the market for plus-size apparel is growing: According to a 2006 report by Worldpanel Fashion, a division of TNS, sales of apparel size 16 and larger account for a third of all expenditure on women’s clothing.
But despite having a “very well developed website and customer database,” said administrator Lindsey Cooper of Baker Tilly, Elvi was unable to secure its financial position. It operates at the middle-to-high end of the apparel market and was apparently experiencing difficulty in justifying its prices in the face of increasing competition from high-street retailers such as Debenhams and Marks & Spencer, which were offering plus-size ranges at lower prices. Financial backers Langholm Capital pulled out of the business earlier this year. Elvi employs approximately 450 people and operates 61 concessions and 28 leasehold stores across the UK and Ireland. It has a turnover of £20 million.
Langholm and former White Company managing director Oliver Spark had acquired Elvi in October 2006. At the time Spark set a target of doubling the business within a year. But little more than a year later he told Catalogue/e-business (issue 146) that he was gloomy about the outlook for 2008 on a “macroeconomic level”.
Research firm Verdict backs up his concerns. “The UK consumer is going to feel the pinch in 2008,” said consulting director Neil Saunders, “and this means one thing for the foreseeable future: The era of solid year-on-year growth for retail is over.”
Verdict forecasts that during the next 10 years retail spending will grow by an average of 2.8 per cent per annum, compared with an average of 4.9 per cent during the past decade. Although Saunders was quick to add that Verdict was not predicting a “retail disaster”, he admitted that there are “undoubtedly rough times ahead”. These, he said, “will sort out the winners from the losers, and not all of those losers will survive”.