Discount shoe chain Barratts Priceless Shoes to cut 680 jobs

Discount shoe chain Barratts Priceless Shoes is to make a further 680 staff redundant after its founder, Michael Ziff, struck a deal with administrators to save the rump of its remaining high street stores.

It is the second time Mr Ziff has bought the struggling chain out of administration in the past three years. The existing management team has bought 89 Barratts Priceless stores from administrator Deloitte for an undisclosed sum, but will close a further 39 shops and 14 concessions. This is in addition to the closure of 18 stores before Christmas.

In a week that has left high street landlords reeling, the closures come on top of 84 stores vacated by lingerie chain La Senza following a pre-pack administration, and the threat of dozens of Blacks Leisure stores closing later this year, after a deal to sell the lossmaking chain to JD Sports.

In December, Barratts Priceless announced 1,600 job losses when no buyer could be found for its concessions business, which operated 374 shoe shops within Arcadia Group and Debenhams stores.

A statement from administrator Deloitte released on Sunday morning said:

“The deal to the existing management team will ensure that the Barratts and Priceless brands and the online business will continue to trade.”

“We are delighted to have negotiated a deal, which will secure the employment of over 1,100 employees and ensure the Barratts and Priceless brands continue, especially given the adversity which has beset the High Street over recent months,” said Daniel Butters, joint administrator and partner in Deloitte’s restructuring services practice.

Deloitte was appointed before Christmas after poor trading and growing competition from discount chains and supermarkets selling cheap shoes threatened Barratt’s ability to pay December’s quarterly rent bill.

“Landlords will count themselves among the losers as once again they find themselves at the bottom of the food chain when it comes to who gets paid when a company fails,” said Liz Peace, chief executive of the British Property Federation. “When you consider that many of our pension funds are invested with them, the pain will also be borne out by the general public.

Ms Peace said that while some landlords may manage to relet space, “for those that can’t, the prospect of voids and empty property rates are now a real threat”.

Nearly three years have passed since Stylo, the listed retailer which owned the Barratts and Priceless Shoes brands, put the chain into administration, closing down 220 of its 380 stores. Mr Ziff, who was chairman of Stylo, bought 160 stores from administrators in March 2009 after shop landlords voted down a restructuring involving a creditor’s voluntary arrangement.

Source: FT