LK Bennett’s Financial Struggles
Introduction to the Crisis
The owner of the fashion brand LK Bennett is facing significant challenges in finding a rescuer, prompting fears that the company could collapse for the second time in six years. The clothing chain, which was founded by Linda Bennett in 1990, is currently working with advisers from Alvarez & Marsal (A&M) on an accelerated sale process.
History of the Brand
LK Bennett was once one of the best-known brands in retail, having expanded to 200 branded stores in the UK and overseas markets including China, Russia, and the US. However, the company currently operates only nine standalone stores in its home market, with another 13 listed as concession stores on its website.
Current Financial Situation
The brand is 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. 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 also showed a sharp loss in sales of £48.8m in 2023.
Previous Ownership and Performance
LK Bennett was founded by Linda Bennett, who opened a store in Wimbledon, south west London, in 1990, with the promise 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.
Future Prospects
It is unclear whether a sale of the loss-making brand is likely or whether LK Bennett’s existing backers might be willing to inject more money into the company. Bankruptcy contingency plans are often prepared by advisors brought in to carry out expedited sales processes. The company’s administration in 2019 resulted in the closure of 15 stores. It is also unclear how many people are currently employed at LK Bennett.
