Oasis and Warehouse on brink of administration amid Covid-19 financial fallout

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The Oasis and Warehouse Group employs some 2,300 people
PA
David Child14 April 2020

More than 2,000 retail jobs are thought to be at risk as women’s fashion chains Oasis and Warehouse prepare to slide into administration.

The companies are expected to appoint big-four auditor Deloitte on Tuesday or Wednesday to handle the insolvency process.

First reported by Sky News earlier on Tuesday, the administration comes as many of the UK’s high street retailers are struggling to survive after being forced to shutter amid the coronavirus outbreak.

The development comes some three weeks after The Oasis and Warehouse Group, which is owned by the failed Icelandic lender Kaupthing, began discussions with prospective buyers following an approach from an unnamed company.

According to Sky's reports, there was understood to have been strong initial interest in a deal before the uncertainty unleashed by the Covid-19 pandemic made a sale impossible to conclude.

The Oasis and Warehouse Group employs some 2,300 people and is spread across over 90 standalone stores, as well as further 437 concessions in department stores such as Debenhams and Selfridges.

It is run by Hashim Ladha, a former executive at Sir Philip Green's Arcadia Group and Asos, the popular online retailer.

Debenhams last week confirmed it was itself entering administration for the second time in 12 months.

The department store chain, which runs 142 stores and employs around 22,000 workers, appointed the FRP Advisory to oversee the process.

Most of its employees in the UK are currently being paid under the Government’s furlough scheme.

Fellow retailer Laura Ashley also plunged into administration last month, blaming the "immediate and significant impact" of coronavirus for tipping it over the edge.

The spate of bankruptcies has come amid warnings the UK economy could fall off a cliff edge due to the Covid-19 lockdown.

In its first estimate of the economic toll taken by the Covid-19 crisis, Britain's fiscal watchdog said the UK economy could shrink by up to 35 per cent between April and June.

In a forecast issued on Tuesday, the Office for Budget Responsibility (OBR) added that unemployment could hit 3.4 million, leaving around one in 10 of the working population without a job.

It based the grim outlook on a scenario where the lockdown lasts three months followed by a partial lifting for three months.

"The longer the period of economic disruption lasts, the more likely it is that the economy’s future potential output will be ‘scarred’ (thanks to business failures, cancelled investments and the unemployed becoming disconnected from the labour market)," the OBR warned.

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