The upmarket British fashion retailer LK Bennett is teetering on the brink of collapse for the second time in just six years, placing hundreds of jobs in immediate jeopardy.
High Court Move Signals Imminent Collapse
On Tuesday, the company took the significant step of filing an application with the High Court to appoint an administrator to the business. This legal manoeuvre strongly indicates that the brand's widely publicised search for a financial saviour has been unsuccessful. The potential administration threatens approximately 280 staff members across its operations.
Founded in 1990 by Linda Bennett, the brand became a staple for professional women and gained a loyal following that included high-profile figures such as the Duchess of Cambridge and former Prime Minister Theresa May. Despite this prestige, its financial footing has remained unstable.
A History of Financial Struggles and Chinese Rescue
This is not the first crisis for LK Bennett. The company previously collapsed into administration in 2019 after its then-owners failed to secure new backing. It was subsequently rescued from insolvency by its Chinese franchise partner, Rebecca Feng, who outbid competitors including Mike Ashley's Sports Direct.
Under its China-based backers, the brand continued to struggle. Its most recent accounts, covering trading up to the end of January 2024, reveal a loss of £3.2 million and borrowings of nearly £22 million. The auditor, Grant Thornton, issued a stark warning, highlighting a "material uncertainty related to going concern".
Breached Covenants and a Looming Deadline
The auditor's report disclosed that the group had breached agreements with its lenders. It pointed to a critical deadline next month to renegotiate the company's substantial debt pile. Grant Thornton added a further caution, noting: "It is expected that there may be a breach [of debt covenants] again."
While the company's bank has provided a letter of intent to continue facilities until at least 31 January 2026, no formal waiver of the breached covenants has been secured. This precarious financial position has been closely watched by the fashion industry, especially in the crucial run-up to Christmas.
Currently, LK Bennett's physical presence is limited. Its website lists only nine standalone UK stores and 13 concessions, including outlets in Ireland and Jersey. The future of these sites is now deeply uncertain as the company faces its most severe challenge yet.
