High road trend model liked by Princess Kate on brink of collapse

Fashion chain LK Bennett is on the brink of falling into administration for the second time in six years. 

On Tuesday, the high-end chain, favoured by the Princess of Wales and former Prime Minister Theresa May, filed an application with the high court to appoint an administrator to the business. 

For now, LK Bennett’s shops and website are operating as normal, but the high court filing indicates the chain’s scramble to find a buyer in the run up to Christmas failed. 

The filing on Tuesday means the chain is at risk of collapsing into the hands of administrators for the second time in just a few years. 

In 2019, the retailer collapsed into administration after its owners failed to pin down a new financial backer. 

The business was eventually acquired out of insolvency by its Chinese franchise partner, Rebecca Feng, who fended off rivals like Sports Direct owner Mike Ashley.  

At risk: Fashion chain LK Bennett is on the brink of falling into administration for the second time in six years

The retailer is owned by China-based backers and has approximately 280 staff.

In a seismic shift from its heyday, the retailer now has just nine UK standalone shops and 13 concession outlets across the UK, Jersey and Ireland. 

In December, Sky News reported that the retailer was working with advisers at Alvarez & Marsal on an accelerated sale process. 

It is understood Alvarez & Marsal started sounding out potential buyers and investors earlier this month. 

In the group’s most recent accounts filed at Companies House for the period ending 27 January 2024, the group made a post-tax loss of £3.5million on turnover of £42.1million. 

In 2023, the retailer’s revenue came in at £48.8million, but the following year this slipped to just over £42million. 

According to the most recent accounts, LK Bennett paid a dividend of £229,000 ‘at the start of the year when performance was doing well’.

It said: ‘Given the decline in revenue, the directors do not recommend the payment of any further dividends’. 

Royal approval: Princess Catherine has worn LK Bennett multiple times over the years

Sign of the times: On Tuesday, LK Bennett filed an application with the high court to appoint an administrator 

In the retailer’s most recent accounts, auditor Grant Thornton warned of a ‘material uncertainty’ surrounding the business’ ability to continue as a going concern. 

The auditor flagged that LK Bennett had breached agreements with its lenders and pointed to a short deadline to renegotiate the company’s debt pile.  

LK Bennett was founded by Linda Bennett in 1990. Bennett sold her majority stake in the chain to private equity firm Phoenix Equity Partners in 2008, but in 2017 returned to advise the business after the retailer started to struggle. 

Bennett bought the company back a short time later.  

Shortly before the business fell into administration in 2019, Bennett emailed staff stating she had ‘fought as hard as I can, with all your help, to turn the business into the success that I know it deserves to be’.

She added: ‘These are difficult and unstable times, and we are doing everything we can to identify the best way forward’.  

The brand is now owned by Byland UK, a firm established in 2019 for the purpose of rescuing LK Bennett from a previous brush with insolvency. 

Byland UK was formed by Feng, who previously ran LK Bennett’s Chinese franchises.

This is Money contacted LK Bennett for comment.