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Jewellery retailer Links of London has collapsed in the UK.
Jewellery retailer Links of London has collapsed in the UK.

UK Links of London placed into administration

The high profile UK jewellery retailer Links of London has collapsed, with Deloitte’s being appointed as administrators.

The business, which operates 28 stores and seven concessions in the UK and Ireland, reported a pre-tax loss of £20.5 million ($AU37.25 million) for 2017, according to its last publicly available filing with the UK’s Companies House.

It has been reported that 350 jobs are now at risk, although Links of London stores will continue to operate as Deloitte attempts to sell the business as a going concern.

Matt Smith, one of the joint administrators, said in a statement: “The company is well-known in its market, having been present on British high streets for almost 30 years. This is not the outcome we hoped for and will of course be difficult news for employees and their families.

Matt Smith
Matt Smith
“The company is well-known in its market, having been present on British high streets for almost 30 years. This is not the outcome we hoped for”
Matt Smith, Deloitte

“The company has had to contend with difficult trading conditions that have impacted the whole retail sector,” Smith added.

While the website has been temporarily suspended and is no longer processing online sales, the international stores – located in the US Canada, Hong Kong and Japan – will not be affected by the UK collapse.

Warning signs?

Rumours of a potential collapse first surfaced in March this year, with UK newspaper the Daily Telegraph reporting that Links of London’s Greek owner Folli Follie Group (FF Group) was looking to pursue a company voluntary arrangement – a UK insolvency procedure that is similar to a deed of company arrangement in Australian law.

While the report was denied at the time, FF Group did confirm Deloitte had been appointed as a ‘financial advisor’.

FF Group itself faced serious financial scrutiny following an internal audit in 2018, which discovered revenue had been overstated by up to $US1 billion ($AU1.5 billion).

The audit lead Greek authorities to lay charges of fraud and money laundering against ten executives and board members, including FF Group’s founders, according to Reuters.

Despite the problems with its parent company, Links of London appointed a new CEO, Annia Spiliopoulos, in September 2018. Spiliopoulos implemented a five-year ‘turnaround strategy’ including the hiring of creative director Dominic Jones.

However, last month FF Group management confirmed it was pursuing a potential sale of the business.

British retail billionaire Mike Ashley and US hedge fund Hilco Capital were reportedly among the interested parties. However, a deal could not be finalised in time to avoid the business falling into administration.

 

More reading:
Pandora reveals re-branding details as sales fall again
Butterfly Silver under administration, future unknown
Valuable lessons from the Bevilles collapse

 











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Tuesday, 15 October, 2019 10:36pm
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