Shoe retailer Pavers steps in to save Barratts
Barratts hired financial advisers Duff & Phelps as administrators in November, risking 1,035 jobs, after failing to secure a £5m cash injection from investors in difficult trading conditions.
It is understood that Pavers, which is being advised by accountancy firm Ernst & Young, is offering more than the £5m and has put in a final offer for the business. Pavers is keen to seal a deal soon, in order to retain staff and as much stock as possible. The rationale for Pavers weakens if the business ends up as just empty stores, it is thought.
Barratts has started deep discounting in closing down sales across its 75 UK and Irish stores. If Barratts shuts up shop, Pavers is unlikely to be interested in acquiring the entire retail estate.
The family-owned Pavers, which is headquartered in York, has made a leap from starting out on a £200 loan in 1971 as a door-to-door seller of comfortable shoes, to becoming one of India’s fastest growing retailers.
The Indian unit, called Pavers England, uses its British branding to position itself as a luxury retailer, and plans to add 120 stores to the 40 shops it runs in the region.
Paver’s UK business, which focuses on selling comfortable shoes to middle-aged Britons, has 950 staff across 32 stores and 120 concessions. The group reported turnover of £63m and pre-tax profits of £5.3m for the year to Jan 2012.
Barratts has had a troubled history since beginning life as a rescued buy-out from Dolcis Shoes. Barratts owner Stylo fell into administration in 2009 but boss Michael Ziff bought back 160 shops from administrators Deloitte. The firm’s concessions business collapsed two years later but a buyer was found to rescue 89 stand-alone stores.