Boohoo swoops on Karen Millen and Coast but jobs axed

Boohoo will trade the brands online but the future of the stores looks bleak and there have been an immediate 62 redundancies at the acquired businesses.

Earlier today, Deloitte was appointed as administrator to Karen Millen Fashions Ltd, Karen Millen Retail Ltd and “certain other group entities” in order to push through a sale, and said the deal followed a competitive process.

The Karen Millen and Coast brands will continue to trade online. Boohoo said that last year direct online sales from its websites totalled £28.4m.

The pair’s 32 stores and 177 concessions will continue to trade “for a short time” while assets are realised. The international arm will continue trading “in the short term”.

The 62 job cuts made so far are to a total workforce of 1,100.

Boohoo chief executive John Lyttle said: “The acquisition of the online business of two great and renowned British brands in Karen Millen and Coast represents another milestone in the group’s growth story as it continues to invest in its scalable multi-brand platform and gain further share in the global fashion ecommerce market.”

Karen Millen was hit by product and other cost inflations, a slump in footfall, weak consumer confidence and “a complex global operation in an increasingly competitive market”, Deloitte said.

Deloitte restructuring partner and joint administrator Rob Harding said: “As we continue to see, the retail trading environment in the UK remains extremely challenging.

“Karen Millen has been seeking to address the financial challenges that it faced by pursuing a sale of the business and, whilst a sale of the whole business has not been deliverable, the Boohoo transaction facilitates the survival of these iconic British brands through an online platform. We thank all employees and other key stakeholders for their support at this difficult time.”