The fashion retailer Select is preparing to call in administrators, putting 2,000 jobs at risk.
The cut-price clothing chain, whose target market is 18-45 year-old women, last year resorted to a company voluntary arrangement, a form of insolvency, to cut its rent bill and stay in business.
Select is owned by the Turkish entrepreneur Cafer Mahiroğlu, who in 2016 teamed up with the Matalan founder John Hargreaves to bid for BHS. 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 has filed a notice of intention to appoint an administrator, a court document that provides management with some breathing space as it prevents creditors from calling in debts for 10 working days.
The document, seen by Retail Week, which first reported the story, was filed at the high court on Wednesday. Quantuma, the advisory firm, has been lined up to handle the administration process, according to the report.
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.
High street retailers are in 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.
A recent fashion report by analysts at GlobalData predicted the amount of money spent on clothing in town centres would fall by 14% – the equivalent of £2.4bn in lost sales – between 2018 and 2023 as spending moves online.
Sofie Willmott, a GlobalData analyst, calculated that more than a third of clothing and footwear sales would be online by 2023, double the rate reported in 2013, when it was about 15%.
If Select does collapse, it would not be for the first time. Mahiroğlu bought it out of administration in 2008.