Brantano enters administration,1,000 jobs at risk

Brantano has announced that it would enter into administration as it suffered from rise in costs since post-EU referendum fall in sterling. The administration would lead to the loss of 1,000 jobs if it was pushed through. But in the meantime, the company would continue to trade as normal while administrators assess its strategy and interest in parts of the business.

Tony Barrell of PwC said that trading has continued to suffer in a depressed and competitive footwear market despite significant improvements in the business and reductions in the cost base. He said that the company has been hit hard due to the sharp decline in sterling that it led to administration. He said the evolution of the UK retail environment and the ongoing shift in consumer shopping habits were the other factors that the company needed to enter into administration.

Barell said that staff would be paid for their work while the business is in administration. Brantano's private equity owner Alteri has been attempting to sell the shoe retailer for the last few weeks. It has also planned to sell its footwear chain Jones Bootmaker as it was also at risk of administration. The company was considering Jones Bootmaker potential buyers including footwear groups Kurt Geiger and Pavers and private equity firm Endless. Jones Bootmaker has 100 shops and about 800 employees.

GlobalData retail research director Maureen Hinton said that Brantano is mainly based in out-of-town stores so it had to be a destination to attract people. All retailers were under pressure from rising costs due to the fall in the value of the pound against the dollar. The rising costs were also affected by the introduction of a minimum wage for over 25 years old and the increases in business rates. Hinton said that cutting employees costs was difficult because floor staff was required to explain shoe sizes to customers and to fetch stock.

H&M and other major chains' addition of footwear range put more pressure on specialist footwear retailers and the specialists experienced such pressure for a number of years. However, Primark and New Look were among the few retailers that have increased the number of shoes and boots they sold.

The shoe retailer Brantano was based in Hinckley, Leicestershire. It was not the first retail group to collapse under Alteri's control. Austin Reed went into administration in 2016 after Alteri bought its debt. Brantano currently employs 1,086 staff in its 73 stores and 64 concessions across the UK.