The latest tale to add to a summer and now autumn of high street woe is the collapse of the Irish fashion brand Orla Kiely, with the group’s shops in London’s Covent Garden and King’s Road, and in Kildare in Ireland, now closed.
Although the fashion side of the business has collapsed into administration, Orla Kiely’s Home and Design licensing business is still trading and is not expected to be affected. It’s thought that the homeware will continue to be sold through a number of distribution partners.
The Insolvency Process has Begun
The Irish designer, known as the ‘queen of prints’, said that the business was entering into voluntary liquidation “following various challenges the company has faced over the past few years, both in the UK and abroad”.
Insolvency practitioners have already been appointed to handle the winding down of the business but they are hopeful that the fashion brand could be saved from total collapse. It’s thought there could be a number of interested parties willing to buy some or all of the business once it is free from the burden of existing creditors.
It’s understood that about 40 of the group’s 50-plus staff in-store and at the brand’s head office in Fitzrovia have been made redundant and were reportedly told the retailer did not have enough funds to pay their salaries. However, it is hoped that if a buyer is found, some jobs could be saved.
Celebrity Endorsements are no Guarantee of Results
Orla Kiely had the backing of high profile celebrities and even royals like Kate Middleton, yet its appeal to shoppers was still no protection against what is clearly a tough time for retail.
In the year to March 2017, sales rose by 15 percent to £8.3m as the brand expanded into the US and the Far East, but pre-tax profits fell to just £101,000 as interest payments on debts rose considerably. The business’s overdraft also more than tripled over the course of the year to £1.9m.
Continuing Problems on the High Street
This is the latest in a long line of failures of shops on the UK’s high streets in 2018. Weak sales, online competition and rising costs and all been cited as reasons for the loss of some 22,000 retail jobs.
Some of the high-profile failures include brands like House of Fraser and Toys R’ Us, while chains such as Marks & Spencer, Homebase and New Look have announced the closure of some of their stores.
In a twist of fate, Orla Kiely is currently the subject of a major exhibition at the Fashion and Textile Museum in London and this could be the last chance to see some of her iconic prints.