Introduction to LK Bennett’s Struggle
The FTSE 100 retail giant, Next, is among those interested in considering a New Year push to buy LK Bennett, the struggling fashion retailer. Sky News has learned that Next is considering a cheaper offer to buy the LK Bennetts brand and other intellectual properties as it prepares to bring in administrators.
Potential Buyers
Retail industry sources said Next was unlikely to pursue an offer involving LK Bennett’s small retail space. Other potential buyers include Marks & Spencer and TFG London, the group that includes Phase Eight, White Stuff, and Hobbs. An offer from Next would reflect the company’s strategy of acquiring struggling retailers in recent years.
Next’s Acquisition Strategy
The company has bought brands including Cath Kidston, Joules, and maternity clothing retailer Seraphine and is currently exploring buying family-run footwear retailer Russell & Bromley. This approach has been a key part of Next’s expansion strategy, focusing on acquiring brands that can complement its existing portfolio.
LK Bennett’s History and Current State
LK Bennett filed a notice of intent to appoint administrators earlier this week, ten days after it was revealed the company was facing collapse as it urgently sought a buyer. Founded in 1990 by Linda Bennett, LK Bennett has been working with advisors at Alvarez & Marsal (A&M) in recent weeks. Once one of the best-known brands in retail, LK Bennett expanded to 200 branded stores in the UK and overseas markets including China, Russia, and the US. However, the company currently only operates nine standalone stores in its home market, with another 13 listed as concession stores on its website.
Financial Performance
LK Bennett Fashion’s accounts for the period ending January 27, 2024, show the company made an after-tax loss of £3.5m on sales of £42.1m. The figures showed a sharp fall in sales of £48.8m in 2023. This decline in sales and profitability has been a significant challenge for the company, leading to its current struggles.
Background and Previous Ownership
The brand is currently owned by Byland UK, a company founded in 2019 with the aim of rescuing LK Bennett from a previous bankruptcy. Byland UK was founded by Rebecca Feng, who ran LK Bennett’s Chinese franchises. At the time of this agreement, Ms. Feng said: "Under our plan, the company will continue to operate from the UK and be careful to preserve the brand’s long-standing and undisputed heritage." The company’s administration in 2019 resulted in the closure of 15 stores.
Founder’s Legacy
Ms. Bennett founded the eponymous chain by opening a store in Wimbledon, south west London, in 1990, promising to "bring a piece of Bond Street to the high street". Her flair for design earned her the nickname “Queen of the Kitten Heel” and her products were worn by the Princess of Wales and Theresa May, the former Prime Minister. In 2008, Ms. Bennett sold the company to a consortium led by private equity firm Phoenix Equity Partners for an estimated £100 million. She retained a share and then bought back the remaining equity in 2017.
