Could clothing chain Bank Fashion have avoided administration with earlier advice?

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Clothing chain Bank Fashion has collapsed into administration following sale of the business by JD Sports to Hilco, a restructuring specialist, in November last year.

Upon reviewing the business, experts at Hilco took less than four weeks to determine that a solvent sale of the business would not be viable and so joint administrators were appointed. Citing reasons such as the highly competitive retail market and the trend of heavy discounting which took place over the Christmas period, the administrators reported that Bank had been struggling for a number of years. In fact, it was revealed that the business was incurring losses of nearly £200,000 per week in the 10 months prior to administration.

With these substantial losses running over a prolonged period of time, it begs the question of whether Bank could have avoided administration if advice had been sought earlier on.

Financial difficulties are never easy to face up to, but there are a number of options available to businesses which do not involve insolvency proceedings. In many cases, the key to avoiding insolvency is seeking professional advice as soon as money troubles appear on the horizon. Early identification of the issues which lie at the heart of the financial problems of any business will give it the opportunity to explore a wider range of options, some of which may no longer be available later on down the line as the situation escalates.

If your business is in a difficult financial position, Forbes is available to provide advice and assistance. Please contact Pauline Rigby in the Business Law Department on 0800 037 4628 or send an email enquiry using our contact form for further information.

Nick Pickup

About Nick Pickup

Nick Pickup is a Solicitor within the Corporate and Restructuring team at Forbes Solicitors. Nick’s blogs cover his specialism of work on mergers and acquisitions, business start up’s, joint ventures, shareholder issues, company restructures and general company advice.
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