Austin Reed has filed a notice of intention to appoint administrators who could be called in as early as next week, putting at risk at least 1,000 jobs. The British retailer is reported to have appointed Alix Partners, an American consulting firm best known for its work in the turnaround space, to handle the administration process.
Austin Reed is known for its suits and boasts of clients including IMF chief Christine Lagarde, Winston Churchill and Elizabeth Taylor.
Alix Partners were initially appointed to come up with options to revive or turn around the company. However, the consulting firm is said to have concluded that the business should be shut down as it cannot be run in its current form.
The administration move by the 116-year old retailer comes just a week after Alteri Investors, a UK-based investment fund, took control of the retailer by purchasing its loan notes from shareholder Darius Capital, an alternative investment management company that is controlled by property tycoon Guy Naggar.
Gavin George, chief executive at Alteri, which is backed by US hedge fund Apollo Global Management, had justified the move saying: "We decided to acquire the equity and shareholder loans to protect our position as secondary lenders to Austin Reed, behind Wells Fargo who remain senior lender."
The move also comes after several attempts to rescue the retailer failed. The company failed to make profits in 2015 despite measures such as closing 31 of its stores in 2015. The debt-laden company had in August 2015 even put up for sale its flagship store at Regent Street, one of the major shopping streets in the West End of London, after selling the lease to Supergroup, the owner of the Superdry fashion brand.