The upmarket fashion brand LK Bennett is reportedly on the brink of collapse for the second time in six years. The company has filed an application with the high court to appoint an administrator, a move that impacts approximately 280 employees. This development suggests that efforts to find a new financial backer have been unsuccessful.
Key Takeaways
- LK Bennett has filed a high court application to appoint an administrator.
- This marks a potential second insolvency in six years for the brand.
- The company employs around 280 staff.
- Recent financial accounts show significant losses and borrowings.
A Troubled Path
Founded by Linda Bennett in 1990, LK Bennett is now owned by China-based backers. The company’s journey has been fraught with financial challenges. In 2019, it entered administration after failing to secure new financial support. It was subsequently acquired by its Chinese franchise partner, Rebecca Feng, who outbid Mike Ashley’s Sports Direct.
Financial Woes Deepen
The fashion industry has been closely monitoring LK Bennett’s situation, particularly in the lead-up to Christmas. The brand currently operates nine UK stores and 13 concessions across the UK, Ireland, and Jersey. According to its most recent accounts, covering trading up to January 2024, the company recorded a loss of £3.2 million and had borrowings amounting to nearly £22 million. Auditors Grant Thornton flagged "material uncertainty related to going concern," noting breaches of lending agreements and a looming deadline to renegotiate its debt.
The auditors also indicated that further breaches of debt covenants were expected. While a letter from the bank stated an intention to continue providing facilities until at least January 31, 2026, a formal waiver of covenants has not been obtained.
LK Bennett has been approached for comment.
