Floral fashion brand Cath Kidston is ready to file for administration as the coronavirus shutdown pushes High Street retailers to the breaking point.
The move will jeopardize nearly 950 jobs at the company, which is known for its colorful designs.
Debenhams, the department store chain, is also expected to appoint directors this week.
And reports have revealed that Topshop owner Arcadia may be able to withdraw from the leases of some of its 550 stores.
Cath Kidston has confirmed his intention to appoint the consultancy firm Alvarez & Marsal as directors.
A spokesperson said it was part of an ongoing process to explore all options for society, which was in the midst of a recovery plan before the global Covid-19 pandemic.
Cath Kidston employs 941 people, 820 of whom have been put on leave under the government employee payment plan.
After the coronavirus outbreak forced stores to close, Cath Kidston remained online.
But most of the employees were put on leave on March 22, which means the government will pay 80% of an employee’s salary up to £ 2,500 per month.
An urgent review of the business began last month and potential buyers have expressed interest.
The chain sells furniture, clothing and home accessories in branded floral and vintage prints. It has 60 stores in the United Kingdom and a presence in 200 worldwide. Founded in 1993, it was bought by Baring Private Equity Asia in 2016.
It is believed that so-called prepackaged administration is now the most likely outcome for Cath Kidston.
Debenhams, which employs approximately 20,000 people, is also considering prepackaging administration.
If this goes ahead, it will be the second time in a year that the retailer has filed for administration.
Debenhams is understood to want to protect the company from claims by creditors, including suppliers who have not yet been paid.
Meanwhile, the Sunday Times reported that Arcadia, which is owned by Sir Philip Green, is preparing to give up several of its property leases.
An Arcadia spokesperson said, “No decision has been made yet.”
Arcadia has laid off 14,500 of its 16,000 workers since the coronavirus shutdown and said board members and executives are being cut between 25% and 50% in wages.
Arcadia is also facing uncertainty about the future of its dealerships in Debenhams stores which include the brands Dorothy Perkins, Evans, Miss Selfridge and Wallis.
As the High Street remains closed, some retailers such as Primark have chosen to cancel orders with their suppliers.
The New Look fashion chain recently informed its suppliers that the payment of stocks already in its stores or distribution center would be delayed “indefinitely”.
While the coronavirus has put a lot of pressure on many companies, independent retail expert Clare Bailey said that retailers have already been under pressure for two or three years due to the uncertainty surrounding Brexit and its effect on consumer confidence.
” [Coronavirus] was the final straw of all the straws that broke the already very broken camel’s back, “she said.