More than 1,000 jobs are at risk after shoe retailer Brantano collapsed into administration.
The company has suffered from a rise in costs since the post-referendum fall in sterling amid a generally lacklustre UK footwear market.
Based in Hinckley, Leicestershire, the chain has 73 stores and 64 concessions across the UK and employs 1,086 staff. Founded in Belgium in 1953 it expanded into the UK by buying 47 Shoe City shops in 1998.
For the last few weeks the company’s private equity owner, Alteri, had been attempting to sell Brantano and another footwear chain, Jones Bootmaker, which it bought along with its sister retailer for about £12m in February 2015. The latter, which has 100 shops and about 800 employees, is also at risk of administration but is talking to potential buyers thought to include private equity firm Endless and footwear groups Kurt Geiger and Pavers.
This is the second time Brantano has entered administration in just over a year. In 2016 Alteri put it into administration and then bought it back.
Tony Barrell of PwC, who was appointed as lead administrator to Brantano on Wednesday, said: “Despite significant improvements in the business and reductions in the cost base, trading has continued to suffer in a depressed and competitive footwear market. Like many other retailers, Brantano has also been hit hard by the sharp decline in sterling, the ongoing shift in consumer shopping habits and the evolution of the UK retail environment.”
He said Brantano would continue to trade as normal while administrators assess its strategy and interest in parts of the business. But Barrell said: “Regrettably, it is inevitable that there will be redundancies. Staff will be paid their arrears of wages and salaries, and will continue to be paid for their work while the business is in administration.”
Specialist footwear retailers have been under pressure for a number of years as clothing chains including New Look and Primark have increased the number of shoes and boots they sell. Some major chains, including H&M, have recently upped their footwear ranges, piling more pressure on specialists.
Maureen Hinton, retail research director at research firm GlobalData, said: “Brantano is mainly based in out-of-town stores and so had to be a destination to attract people that was always going to count against it.”
All retailers are under pressure from rising costs because of increases in business rates, the introduction of a minimum wage for over-25s and the fall in the value of the pound against the dollar, the currency in which many products are bought on the wholesale market. Hinton said it was harder for footwear specialists to cut employee costs because floor staff were required to fetch stock and explain shoe sizes to customers.
Brantano is not the first British retail group to collapse under the control of Alteri, a group backed by US private equity firm Apollo Global Management. Last year tailoring specialist Austin Reed went into administration soon after Alteri bought its debt.