Upscale fashion retailer LK Bennett is on the brink of collapse for the second time in six years after submitting an application to appoint administrators.
Court records show the company filed papers with the Supreme Court on Tuesday indicating that efforts to secure new financing or a buyer may have failed. The move puts around 280 jobs at risk across the group.
Founded in 1990 by Linda Bennett, LK Bennett became synonymous with elegant British style and built a loyal following that included senior politicians and members of the royal family. However, the brand has struggled to restore financial stability since its first bankruptcy in 2019.
In its previous collapse, LK Bennett fell into insolvency after failing to secure new investment and was subsequently taken over from bankruptcy by its Chinese franchise partner Rebecca Feng. This deal was followed by a competitive process in which it beat out competitive interest from Mike Ashley, the founder of Sports Direct.
Despite the rescue, the retailer continued to face increasing pressure from rising costs, weak consumer spending and structural changes in the fashion sector.
The company currently lists just nine standalone stores in the UK and 13 concessions across the UK, Ireland and Jersey, reflecting a significantly smaller physical presence.
According to LK Bennett’s latest accounts, covering trading to the end of January 2024, the company reported losses of £3.2m and debts of almost £22m.
Auditor Grant Thornton warned of “significant uncertainty surrounding the company’s ability to continue as a going concern.” The accounts revealed that LK Bennett had breached agreements with its lenders and had a deadline to renegotiate its credit facilities.
While the auditor noted that the company had received a letter from its bank indicating its intention to continue providing facilities until at least January 2026, it also confirmed that no formal waiver of agreement had been secured, leaving the company unprotected.
LK Bennett’s fate was closely watched across the fashion industry in the run-up to Christmas, with hopes that seasonal trading might stabilize cash flow or lure a buyer. The decision to seek administrators suggests that these efforts have not resulted in the needed turnaround.
If the administrators are formally appointed, it will be another high-profile loss on Britain’s high streets as fashion brands continue to struggle with subdued consumer demand, rising rents, labor costs and the shift to online shopping.
LK Bennett has been contacted for comment.
