Barratts Priceless 'nears administration'

Deloitte could be formally instructed as administrator to the footwear chain today after poor trading hit performance, according to the Financial Times.

Strong competition from discount retailers and weak sales have left the chain in danger of being unable to pay its next quarterly rent bill, due on December 25.

Barratts Priceless survived administration in 2009 when 220 of its 380 stores in UK were closed down by Barratts and Priceless Shoes owner Stylo.

Milder autumn weather is said to have hit profits as retailers were forced to discount to win custom. Barratts Priceless’ latest accounts show it made a pre-tax profit of £6.1m in the 18-month period to July 31 2010, recording sales of £218m.

Stylo chairman Michael Ziff bought 160 stores from Deloitte in March 2009 after shop landlords voted down a restructuring involving a creditor’s voluntary agreement (CVA). The retailer operates 300 concessions, largely in Debenhams and Arcadia stores.

One source said: “Barratts Priceless’s problem is not so much rival shoe operators like Clarks and Shoe Zone, but New Look, Primark and the supermarket chains who are all selling cut-price shoes, as their type of customer will happily buy shoes there. Most of their stores are located in secondary towns, where consumers are struggling.”