Youth fashion chain D2 has become the first post-Christmas casualty, collapsing into administration and putting more than 1,000 jobs at risk.
The retailer, which specialised in brands such as Wrangler, Levis and Kickers, is based in Scotland and had 79 shops, including three in Dublin.
Insolvency specialists James Stephen and Dermot Power from BDO Stoy Hayward have been appointed to take control of the business. The D2 website has been taken offline and two Irish stores have closed. Twenty-two people at the chain’s head office and 39 Dublin store staff were made redundant.
The administrators said they intended to continue trading in the rest of the outlets “with a view to selling all or part of the company as a going concern”.
The retailer’s collapse comes days after the final quarterly rent day of the year, which puts a huge strain on a retailer’s cash flow. Banks also typically call in their loans at this time of year, when corporate coffers are full and before cash is laid out for the year ahead. Many retailers have enjoyed a bumper Christmas, but insiders say young fashion has been hard going. Smaller retail groups have also been less well-placed to absorb the impact of weaker sterling and cost inflation.
Several high profile store bosses have warned that 2010 is likely to be a tough year as shoppers are hit by inevitable tax rises. Analysts have warned that more retail failures are likely, following the collapse of books chain Borders and the Threshers off-licence group in the weeks before Christmas.
D2′s demise comes 23 months after it was acquired – in January 2008 – from retailer Sir Tom Hunter by its co-founders Alan Kinney and Jim McGonigle. The purchase price was not disclosed and Hunter described the deal as “part of a decluttering strategy”.
D2 is the third Hunter fashion business to have run into financial problems. He sold the ailing Qube chain to JJB, where it was a key factor in JJB’s near-collapse.
Hunter’s USC chain has also had problems, going into administration 12 months ago. Most of the stores were bought back by Hunter, without the retailer’s debts and 300 staff, in a pre-pack deal with the administrators. Hunter still owns the Office shoe chain. He also has a stake in House of Fraser and owns Wyevale garden centres, which is now using local trading names. At the time of the D2 sale Hunter said he had “structured the deal to give the new owners the very best opportunity from which to capitalise on their position in the market.”
D2′s head office, which was taken over by BDO staff, had remained inside Hunter’s Ayrshire HQ.
Administrator James Stephen said: “It is unfortunate that difficult trading conditions have significantly affected the retail sector. We are continuing to trade and hope to sell all or part of the company as a going concern.”