The fashion retailer Select is set to collapse into administration on Wednesday, putting 2,000 jobs at risk.
The loss-making fashion chain, which has 180 stores, has been struggling for several years and its expected failure comes just a year after it resorted to a company voluntary arrangement, a form of insolvency, to cut its rent bill in order to stay in business.
Quantuma, the advisory firm, will oversee the administration, which was signalled six weeks ago when the company lodged a notice of intention to appoint an administrator, a court document that prevents creditors from calling in debts for 10 working days. The retailer, which is aimed at women aged 18-45, then bought more time by filing a second notice last month.
The Quantuma partner Andrew Andronikou said he expected Select to enter administration on Wednesday. “The company will be going into administration within the next 48 hours,” he said.
Select is run by the Turkish entrepreneur Cafer Mahiroğlu, who bought the chain out of administration in 2008. The retailer is owned by Özdemir Üç Tekstil, his family’s clothing business, which has factories across Turkey, Romania and Vietnam. In 2016 Mahiroğlu was linked to a bid for BHS in partnership with the Matalan founder, John Hargreaves. In the end no buyer was found for the 164-shop chain, which had been sold for £1 by Philip Green to the serial bankrupt Dominic Chappell a year before.
Select’s problems come at a time when bricks-and-mortar retailers face rising costs and falling sales. Green’s fashion empire Arcadia is exploring a CVA in an attempt to turn around the Topshop group, as is Outdoor & Cycle Concepts, the group behind high street chains such as Cotswold Outdoor, Runners Need and Snow+Rock. Last month Debenhams revealed it was using a CVA to close 22 department stores.
Select made a loss of £15.5m on sales of £117m in the 18 months to 2 December, according to the most recent accounts filed at Companies House. Özdemir is understood to be willing to continue funding Select but it is likely any turnaround plan would involve another CVA.
High street retailers are on the frontline of changing habits as millennials increasingly opt to buy online. Select bills itself as offering “effortless catwalk-to-high-street style” but in recent years its customer base has been picked off by fast-growing websites such as Boohoo and PrettyLittleThing, which sell dresses for as little as £5.
