La Senza, the £140m-turnover lingerie chain owned by private equity firm Lion Capital, has had to call in the specialists as poor sales push the brand inexorably toward insolvency.
KPMG is now rummaging through La Senza’s knicker drawer, looking for ways to restructure the business. This could mean administration for the smalls seller, or a company voluntary agreement (CVA) to cast off some of its 158 UK stores.
The most pressing issue is the chain’s rent bills, paid quarterly and due this month. Customers just aren’t spending enough to cover La Senza’s vast high street overheads - you’ve got to sell a lot of thongs to cover Oxford Street rent and rates.
Theo Paphitis, the Dragon’s Den star and former owner of La Senza, tweeted about the news last night: ‘It really saddens me to hear the reports since it was once my baby,’ he said. ‘I take no comfort.’ Paphitis bought the brand for £1 and sold it in 2006 for £100m.
Unfortunately, La Senza is just the latest in a long list of struggling high street brands. Shoe chain Barratts Priceless called in the administrators last week. It too was crippled by its quarterly rent bill: the next instalment, due on Christmas Day, would have pulled the brand under. Last month Comet was sold off by owner Kesa for just £2 as losses piled up. And Blacks Leisure, the indebted outdoor retailer, issued an appeal for a ‘white knight’ investor to save it from administration only last week. Sports Direct is now considering grabbing a jousting stick and riding to its rescue.
If the economy doesn't pick up in 2012, we may see many more household names unable to make the rent. To try and stave off a total high street collapse, Mary Portas yesterday unveiled a report featuring 28 ways to save the high street. Alas for its 2,600 staff, the measures may come too late for La Senza.