Due to the lockdown in the United Kingdom, British retailers are facing real-time disruption in supply chain and business operations. As per the retail economics consultancy survey, nearly 25 percent of the UK’s businesses have been hit with supply chain disruption and if the situation continues, there is a possibility that many of the retailers would close down their operations permanently.
In such a scenario, the fashion retail company, Cath Kidston has decided to shut down all of its 60 stores across United Kingdom including two stores from Scotland that would be closed on permanent basis as the company confirmed that it is not going to start all stores again even after the COVID-19 lockdown is finished. This decision has axed around 900 jobs except for 32 member staffs, which will reportedly be continuing their functions. The current situation presents the rising financial pressure on the company as it has also recently closed its Aberdeen outlets in the year 2019 because of higher property expenses. The news of closures came after the company's owner, i.e. Baring Private Equity Asia secured a deal to repurchase Cath Kidston online and brand operations earlier in this month from administrators Alvarez & Marsal.
The Chief Executive Officer of Cath Kidston, Melinda Paraie stated that while Cath Kidston acknowledges that the future of the company has been secured, it is an extremely difficult situation to bid goodbye to many employees. She further said that despite extensive efforts to fight against novel coronavirus crisis, the company has been unable to protect a solvent sale that would have allowed to carry on trading in its current form.
The representative of the Baring Private Equity Asia stated that the group is distressed because of the novel coronavirus crisis, which pushed the company to close its retail store's network and effected many employees. However, the company is happy that it can secure the employment of some of the Cath Kidston employees due to sustainable digital business. The spokesman also stated that they would support the company further in the development via its global wholesale and franchise stores as well as its e-commerce platform.
Vintage-inspired retailer company, Cath Kidston was incorporated in the year 1993 and started its first shop in Holland Park in west London a year after. During the time of its fruitful years, the company had established over 200 stores throughout the globe but has lost around £27 million in the last 24 months.
Another retailer, Sir Philip Green’s Arcadia Group, which holds brands including Miss Selfridge, Topshop and Dorothy Perkins, has recently served notice to its landlord informing its decision to vacate the stores immediately after the lease gets over. It indicates that the company might close its shop as novel coronavirus pandemic has deeply affected the major part of the business. The question arises that why the retail-chain companies like Cath Kidston, which has stores in Princes Street, Edinburgh and Gordon Street, Glasgow, are not taking the support of the UK government, which have already announced Coronavirus Business Interruption Loan Scheme.
Overview of Cath Kidston
Cath Kidston is one of the lifestyle brands in the United Kingdom, popular for its vintage prints. The company’s product types include clothing, purses & wallets, cross body bags, kids bags, kids clothing, accessories, beauty, gifts, home furnishing, kid toys etc, with operations in more than 16 different nations. The company has established itself into a favourite prototypically UK’s lifestyle brand with an international and multi-channel existence. In the year 2015, the company repurchased Japanese business from franchise partner, and the company has now more than 30 stores in overseas.
List Of The Global Retailers Shutting Down Their Stores Due To Novel Coronavirus Crisis
The retail chains are facing immense problem due to COVID-19 crises as they are forced to close all their stores due to government instruction for complete lockdown globally. In March 2020, many of the chains declared their changes and closure of operations. However, many of the companies are still operating online activity and advising their employees to work from home. Below is the list of the few companies who have announced regarding closures and changes:
- John Lewis– John Lewis has temporarily closed its 50 stores amid this crisis. As per the company, it is the first time in the 155 years of its history that it is not physically available for the customers. However, the company revealed that it would remain open online via its site Johnlewis.com.
- New Look– The fashion retailor company also announced to shut down its entire store from 21st March 2020. However, the online operation of the company will remain open.
- River Island – Last month, the other retail company, i.e. River Island, announced the temporary closing of its outlets. The company also said that they are facing some problem with its online business due to closures of its distributing centre. However, the company also revealed that it is still taking orders via its e-commerce site.
- Next Plc –The retail chain company, Next Plc, declared that it had shut its distribution and warehouse business which supports its online business. It further said that it would not take any other order from 26th March 2020 as the company is following government guidelines.
- TK Maxx –The clothing and homeware retail company, TK Maxx also announced to shutting down its online operation from March 2020 till the time UK government lifts restrictions. However, for customer satisfaction, the company has extended its return policy to 30 days from when stores and its website restarts.
- Apple Inc. – In March, the iPhone provider company, Apple Inc., had announced that it will close all its stores outside china for some time to minimize the risk of community transmission of coronavirus. However, the company has restarted its 42 branded stores in China.
- H&M - European premium fashion giant, H&M has shut down its 49 stores due to novel coronavirus crisis, including five Washington stores. The company said that the safety and health of the employees are the foremost priority for the company during this situation. As per the media report, this decision could affect around 1,300 jobs.