Almost half of the chain’s 185 stores have been closed, putting about 600 people out of work, after KPMG was appointed as administrator. Apparently its owner, Scottish retail entrepreneur John Kinnaird, has been unable to raise the £2m he needed to keep the company afloat after its private equity backers EPIC pulled out earlier this month.
All is not totally lost for Dolcis – the administrator suggested that its strong high street brand could yet entice a new buyer to have a go at turning it around.
However, we don’t share his optimism (and in fairness, he’s paid to be upbeat). The retail environment is obviously not easy for anyone at the moment – but for Dolcis to run into trouble so quickly shows just how difficult it is in this particular sector of the market. Specialists like Dolcis have been eaten alive in recent years by competition from clothing stores like Zara, Primark and particularly New Look, all of whom now sell cheap and (reasonably) cheerful shoes in large quantities. That’s why rival Stead & Simpson is currently up for sale, and Clarks recently sold Ravel.
So it’s a little hard to see who would want Dolcis – and even if they did, how they’d be able to restore it to its former glory. Even Kinnaird himself admitted that Dolcis was ‘an old, tired brand’ when he launched a new-look store in Glasgow last month. The likelihood is that we’re about to see a sad demise for a veteran of the UK high street (Dolcis has been operating in one form or another since 1863, and under its current name since it floated in 1920).
And although Dolcis may be one of the first victims of the credit crunch, it’s unlikely to be the last. Other ailing retailers with private equity backers could go the same way this year, if the much-vaunted consumer spending slowdown does happen.
Leisure is another sector likely to feel the squeeze. JD Wetherspoon said today that like-for-like sales were down 3.2% during the festive period, because people were buying fewer drinks at the bar. When the cheapest pub chain in town can’t sell booze over Christmas, things must be pretty bad...