Women’s fashion chains Oasis and Warehouse were today preparing to slide into administration with 2,300 jobs now at risk during the coronavirus pandemic.
The chains are expected to appoint auditor Deloitte by tomorrow at the latest to run their administration after the lockdown forced them to shut their 90 UK stores.
The company, which is owned by the failed Icelandic bank Kaupthing, also had 437 concessions in department stores including Debenhams and Selfridges.
Oasis and Warehouse are expected to appoint auditor Deloitte to run their administration
It comes three weeks after Oasis and Warehouse started discussions with prospective buyers following an approach from an unnamed company.
The businesses have been struggling along with many of the UK’s high street retailers which have been forced to close all their stores due to the virus outbreak.
Deal talks with prospective buyers fell through with the uncertainty caused by the pandemic thought to have made a sale impossible to conclude, reported Sky News.
The administrators are expected to furlough most of the employees soon after talks began with potential buyers. An announcement is expected by tomorrow.
Women’s fashion chains Oasis and Warehouse shut all 90 of their UK stores due to the virus
Meanwhile Next returned to selling clothes online today after the retailer put extra safety measures in place to ensure warehouse staff can work safely.
But by 9am the website had closed again, saying it had already received all the orders it could process for the day, but it would return tomorrow.
The retail giant closed its online operations in late March amid the coronavirus crisis, following criticism from staff who felt unsafe at work.
Behind the scenes, bosses have been upgrading warehouse space and limiting workers to accommodate the Government’s distancing measures.
The coronavirus pandemic is expected to change the look of high streets for ever, with famous names like Laura Ashley having already gone.
Many national chains are unlikely to re-open hundreds of stores which were already struggling as a result of a shift to online shopping.
Many town centres will have to switch their focus towards leisure, entertainment and housing, with shopping streets turned to residential use.
The number of visits to high streets, shopping malls, parks and other leisure resorts dropped by 85 per cent as the lockdown cut in the second half of last month.
Last week Debenhams, which employs around 22,000 staff, confirmed it had entered administration for the second time in a year.
Its 142 UK stores remain closed in line with Government guidance and the firm said it will work to ‘re-open and trade as many stores as possible’ when restrictions end.
However, it said its Irish business, which runs 11 stores with around 1,400 staff, will cease trading. It will continue to trade online in Ireland, the UK and Denmark.
Chef Yotam Ottolenghi calls for a ‘national timeout’ on rent to protect UK restaurants
Yotam Ottolenghi, in May 2018 in London
Top chef Yotam Ottolenghi has warned that restaurants are being threatened by landlords with eviction for unpaid rent during the coronavirus lockdown.
Mr Ottolenghi told BBC Radio 4’s programme today: ‘The biggest worry that we have is rent. When corona started and we were asked to close our doors, which is totally understandable because of safety, nobody really addressed the issue of the rents.
‘Many, many have not been paying rents. Others have got into arrangements with their landlords, but this has not been solved.
‘Some landlords have been threatening to prosecute and other legal actions against the tenants at restaurants in such a time because they are not paying their rents, and landlords, many of them, rely on the rent to pay their own debts.’
He is calling on the Government to give restaurants a ‘litigation ceasefire’ with a debt enforcement moratorium for six months in which credit action is banned.
Mr Ottolenghi said this would mean business owners cannot be litigated against to pay rent – and the same for landlords who can’t pay their mortgages.
He has also suggested a ‘national timeout’ of nine months rent free from April to December in which landlords would also be compensated.
Construction too is suffering, while consumer confidence has dropped at the most rapid rate since the darkest days of the 1970s.
The Centre for Economics and Business Research has predicted that the lockdown is costing the economy £2.4billion a day, equivalent to 31 per cent of national output.
Elsewhere on the high street footwear chain Clark’s said last week a small number of its 347 stores may never open again once the lockdown is over.
The crisis on the high street has already claimed the likes of restaurant chain Carluccio’s and homeware store BrightHouse.
Figures last week also showed how the rot caused by widespread closures and social distancing measures was spreading into manufacturing and construction.
The sales of new cars fell 44 per cent in the last month, according to figures from the Society of Motor Manufacturers and Traders.
There were 203,000 fewer new cars registered in March compared to the same month 2019 after coronavirus forced the closure of showrooms.
This marked the most dramatic decline for the key month of March – when new number plates are released – since the late 1990s.
The UK’s automotive industry was already struggling from falling sales blamed on weak consumer confidence and confusion over what fuel technology to buy.
Car manufacturers including Nissan, Jaguar LandRover, and Vauxhall have mothballed their factories in the UK and across the world.
At the same time confidence among UK consumers, already low due to political uncertainty over Brexit, plunged at the most rapid rate since records began in 1974.
The numbers reflect the concerns of economists who have said the economy may be shrinking at a faster rate than the Great Depression of the 1930s.
Nearly 3,000 gyms and leisure centres face closure with loss of 100,000 jobs as landlords use loophole to threaten eviction for unpaid rent during lockdown
Nearly 3,000 gyms and leisure centres face the threat of closure after landlords threatened them with eviction for unpaid rent during the coronavirus lockdown.
Up to 100,000 jobs could now be at risk with trade body UKActive calling for urgent action to protect places of exercise which remain shut as the pandemic continues.
Fresh legislation to protect commercial tenants was brought in last month, but it does not stop landlords forcing them to pay rent withheld due to the lockdown.
An empty gym in Leicester on March 21 after the Government ordered them all to close
UKActive chief executive Huw Edwards told how taking legal action such as issuing statutory demands and winding up orders was ‘entirely disproportionate’.
He said yesterday: ‘A worrying number have decided to pursue statutory demand notices or winding up orders.
‘We need the Government to act now to direct within the Act that landlords cannot do this. With 2,800 gyms at risk of permanent closure, and 100,000 jobs at stake, time is of the essence.’
Section 82 of the Coronavirus Act 2020 introduced on March 25 intends to help protect commercial tenants by banning the forfeiture of commercial leases until June 30 – or longer if the Government deems necessary – for non-payment of rent.
But it does not stop landlords taking action such as rent arrears recovery, making a debt claim, issuing a statutory demand, or starting winding-up proceedings.
Notices on exercise equipment at a gym in Long Eaton, Derbyshire, notifying customers of social distancing measures on March 20, the day that all gyms in Britain were closed down
UKActive therefore wants the Government to amend the Act so landlords cannot purse legal action, and introduce financial support for them for a rent holiday.
In one case, David Lloyd Leisure asked a landlord for a waiver of rent due on March 25 until it can reopen its clubs, but the landlord replied by threating legal action.
The chain’s chief executive Glenn Earlham told BBC News : ‘This situation is unfortunately entirely outside of our control.
‘We want to work together with landlords to ensure we can survive this pandemic and emerge with businesses able to continue to pay rent and other costs in the future.’
And PureGym chief executive Humphrey Cobbold said: ‘Time is of the absolute essence, given that proceedings such as statutory demands and winding up orders threaten to force companies into insolvency within days of being issued.’