The administrator appointed to PAS Group describes his role as 'tactical'.
Insolvency practitioners believe more retailers will follow the lead of retailers such as PAS Group – which appointed voluntary administrators last Friday – and Jeanswest, Tigerlily and Bardot, which collapsed earlier this year but have since been returned to their owners after closing stores, exiting leases, cutting staff and slashing overheads.
‘‘I do think people will look at the administration process as a way of restructuring or just fixing the balance sheet,’’ said PwC partner and PAS Group administrator Stephen Longley, who is seeking expressions of interest for the retailer and wholesaler, which owns the Review, Black Pepper and JETS brands.
‘‘Whether it be retail or industry generally a lot of organisations have gone into hibernation and it’s been easier to go into hibernation than it will be to reemerge after hibernation – the rampup period will be harder on cashflows,’’ Mr Longley said.
‘‘Potentially the administration process is a way of addressing all those liabilities that have backed up during that COVID isolation period.’’
‘‘We may see the use of what I’d describe as tactical administrations, administrations that are really designed to restructure the business because they’ve not been able to achieve it on a consensual basis,’’ said KPMG restructuring partner James Stewart, the former joint administrator of Jeanswest, which was sold back to its former owners after closing a quarter of its stores.
‘‘Sometimes the owners of those businesses just need to fix it and the best way is to put it through an administration process – that’s not the preferred way but when all other options are exhausted that might be the way they have to lean into stores.’’
https://www.copyright link/companies/retail/tactical-collapses-on-the-rise-as-retailers-restructure-20200601-p54yag
We face a period of uncertainty, hopefully to emerge with re-set retail leases. I feared the break-up of the design group which is central to PAS.
Ash
