Next has bought Cath Kidston for £8.5m after the embattled fashion brand filed for bankruptcy. The vintage-inspired lifestyle and homeware brand, founded in 1993, first collapsed in 2020, resulting in the loss of 1,000 jobs and the closure of the majority of its UK stores.
Cath Kidston has now entered administration for the second time after struggling under the ownership of Baring Private Equity Asia, which sold the business last summer to distressed investor Hilco Capital.
125 jobs are expected to be at risk as a result of the imminent closing down of the last four stores across England.
The news is the latest instalment in a series of floundering retailers filing for administration amid the financial downturn, including furniture brand Made.com and clothing retailer Joules, which were also bought by Next in late 2022.
Eversheds Sutherland has again been engaged by Next having also advised the client on the acquisition of Made.com.
Eversheds insolvency partner David Gray, who led on the deal, told Legal Business: ‘We have seen low levels of restructurings and insolvencies since the pandemic, but numbers are increasing in large part because of the after-effects of the Covid restrictions and the additional debt burden many companies took on in order to survive.’
He added: ‘My prediction for the next 12 months is an increase in high-profile restructurings and a significant increase in administrations as the overhang from Covid starts to impact the economy.’
Shoosmiths is advising administrator PwC on the sale of the brand name, domain names and IP to Next.
National head of Shoosmiths’ corporate restructuring and advisory team, James Keates, was the lead partner representing PwC. Keates has advised numerous businesses and administrators in relation to restructuring and insolvency proceedings, such as Monsoon Accessorize and the administrators of TM Lewin.
Keates said: ‘We are happy that we have been able to play our part in securing the future of this iconic British brand.’