Deloitte managing wind-down of Karen Millen in Australia

16 September 2019 Consultancy.com.au

The Australian wing of UK fashion outlet Karen Millen has appointed administrators from Deloitte to oversee its winding down. The news will see some 80 jobs lost, although a number of these are understood to be casual, while the store has slashed prices by as much as 75% to clear its stock in Australia over the next month.

The UK’s retail sector has endured a tumultuous two years, with a number of historic brands collapsing on British high-streets. A perfect storm of suppressed wage growth, flagging consumer confidence, Brexit anxiety and the tumbling value of the pound has seen numerous casualties since 2017, and one of the latest of these was fashion chain Karen Millen.

The British women's clothing retailer specialises in tailoring, coats and eveningwear, but fell into administration in August, following poor finances. The Karen Millen holding company lost £5.7 million in the year ending February 2018, after losing £11.9 million in the previous financial year. The matter was not helped by founder Karen Millen being declared bankrupt in the High Court in London in the Spring of 2017, due to unpaid income tax. It was stated that Millen was owing HM Revenue and Customs (HMRC) £6 million after attempting to use a 'tax avoidance' scheme which HMRC successfully contested in 2010.

Karen Millen is being wind-down in Australia

While Karen Millen the brand was ultimately bought out of administration by e-commerce giant Boohoo for £18 million ($AU32 million), its new owners have quickly unveiled a stringent plan to cut its expenses moving forward, compounding the concerns faced by many employees. As a result, 200 stores were announced as being in line for closure, putting up to 1,100 jobs at risk.

Now, the Big Four firm behind that administration process has taken the charge of the situation in Karen Millen’s Australia wing. Deloitte Partners Richard Hughes, Tim Norman and Michael Billingsley had been appointed administrators of Karen Millen Australia. Deloitte Australia has subsequently announced it is now conducting a “controlled wind down” of the label’s seven independent Australian stores along with eight concessions housed in department stores David Jones and Myer.

Deloitte will now oversee the closure of all the retailer’s Australian stores. The news will see 80 jobs lost, in spite of Karen Millen Australia having turned over around AU$19 million in 2018. Karen Millen has cut prices by as much as 75% to clear stock in stores and online by the end of September.

Administrator Tim Norman said in a statement, “With the UK business now sold and the label withdrawing from Australia, we expect to wind down the business here and progressively close all stores in the coming weeks. If quick, shoppers can expect some bargains with discounted stock being sold from stores and online until the end of this month.”


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