This year marked significant turbulence in the retail sector with numerous high-profile collapses.
- Homebase fell into administration, yet continued online and with CDS Superstores acquiring many of its assets.
- CTD Tiles found new ownership with Topps Tiles, despite leaving many stores out of the deal.
- Carpetright’s financial struggles led to its acquisition by Tapi, impacting debts and customer orders.
- Luxury retailer Matches, funded by Frasers Group, faced administration shortly after acquisition.
This year witnessed considerable upheaval in the retail industry, marked by multiple well-known retailers facing financial turmoil. Homebase became a significant casualty, entering administration after failing to find a buyer. It reported a substantial loss of £84 million for the year to January 2023. Seeking to manage its financial woes, Homebase engaged Teneo, which ultimately led to a £25.6 million pre-pack deal. CDS Superstores acquired 70 of its UK stores, along with the brand name and intellectual property, though 49 stores remain at risk. CDS plans to rebrand these locations under The Range, with an enhanced selection of products. Meanwhile, M&S and Kingfisher are showing interest in some remaining properties.
CTD Tiles experienced its own challenges, eventually being acquired by Topps Tiles in August. This acquisition included certain brands and 30 retail stores, but left 56 locations out of the agreement. The deal stirred controversy, particularly with Topps Tiles’ shareholder Piotr Lipko, who criticised it as detrimental. Despite the discord, the acquisition offers Topps access to a broader customer base, particularly housebuilders and designers.
In July, Carpetright collapsed as it faced insurmountable debt and loss-making operations, leading to its sale to Tapi. Tapi secured the intellectual property, alongside two warehouses and 54 stores, acknowledging that saving the entirety of Carpetright was impractical. At the time of its administration, Carpetright owed significant sums to other businesses and had amassed an £8 million deficit in unfulfilled orders. Historically, Carpetright has struggled financially, having attempted recovery through a company voluntary arrangement in 2018.
Following Carpetright’s downfall, its sister company, The Floor Room, also entered administration. The closure affected numerous operations, including 34 John Lewis concessions, leading to over 200 redundancies. In a supportive gesture, John Lewis offered employment opportunities to affected The Floor Room partners where feasible.
Ted Baker encountered financial distress in April, leading to the closure of all its UK and European stores after the brand’s licence was withdrawn from its UK operator. Despite efforts to overcome financial setbacks accumulated during a difficult period, the brand could not stave off administration. Subsequently, the brand relaunched online, managed by its US partner.
The challenges extended to Matches, which entered administration just three months after Frasers Group’s acquisition. Despite Frasers Group’s backing, Matches consistently missed its business targets, leading to financial losses. This prompted significant staff layoffs and spurred debate over the administration’s necessity.
Muji also sought administrative assistance as part of a wider reorganisation strategy. Though it retained its UK stores, it restructured under its European holding company, buoyed by financial investment from main shareholders. The company ensured continuity in operations across stores and online platforms.
Finally, Farfetch was bought by Coupang through a pre-pack administration deal, as the luxury e-tailer endeavoured to navigate bankruptcy. A bridge loan of £394.7 million supported the transaction, prompting a reshaping of the company workforce and ownership.
In September, The Body Shop emerged from administration under new management led by Mike Jatania. Despite a sizeable retail presence, preceding ownership changes had driven it into insolvency. Under new leadership, The Body Shop aims to reposition itself strategically from its Brighton base.
The retail sector faced significant upheaval this year, highlighting the ongoing challenges and transformations within the industry.
