Poundland proprietor buys LK Bennett out of administration however job losses loom

LK Bennett has been bought out of administration by an investment firm that swoops on struggling brands.

The upmarket British fashion brand filed its intention to appoint administrators earlier this month after failing to find a buyer.

Gordon Brothers, which bought Poundland for £1 last year, said it had bought the LK Bennett brand from administrators and would transition it to an ‘asset-light model’, suggesting job losses are on the horizon.

The investment firm brought Laura Ashley back from the brink in 2020 and operated a similar ‘asset-light’ strategy. It no longer owned most of the operations, instead partnering with third parties to run its stores, before selling it to Marquee Capital.

LK Bennett currently employs about 280 staff.

LK Bennett has been bought out of administration by the owner of Poundland

Founded in the 1990s, LK Bennett started with a single boutique in Wimbledon, before growing to have 9 stores in the UK and operating at a further 13 concessions.

However, it has come under pressure despite its reported high-profile fans, including the Duchess of Cambridge.

In the company’s most recent set of accounts in the year to January 2024, it lost £3.2million with debt of almost £22million. Its auditor Grant Thronton warned it expected there may be a breach of debt covenants.

It is the second time in six years LK Bennett filed for insolvency, after it was bought by Byland UK, a company established in 2019 for the purpose of rescuing the firm.

Next had reportedly been in the running to buy LK Bennett, having bought other brands such as Cath Kidston and Joules.

Tobias Nanda, head of brands at Gordon Brothers said: ‘We are excited to add LK Bennett to our portfolio of brands and proud to steward the brand into the next phase of growth bringing LK Bennett’s modern luxury to both long-time followers and new customers from around the world.’

Gordon Brothers bought Poundland for £1 last summer after a sharp downturn in trading. 

In its most recent trading update, the discount retailer said its sales had dropped 2.9 per cent in the final quarter after a slew of price cuts amid a turnaround plan.

Nearly 150 shops were shut after the group avoided collapse last year, resulting in 2,200 lost jobs.