Fashion retailer Select falls into administration.

13/05/2019 – updated 9/7/19 See below.

Retail chain Select has officially fallen into administration, after filing court documents to appoint administrators last month. The retailer, which operates 169 stores across the UK, announced its administration on May 9th – just weeks after filing a notice of intention at the High Court. The move places 1,800 jobs at risk.

Administrators Andrew Andronikou, Brian Burke and Carl Jackson of advisory firm Quantuma have been appointed to try and secure a sale of the company, with the administrators confirming: ‘We will continue to trade Select whilst we assess all options available to the business, with the aim of achieving the optimum outcome for all stakeholders.”

Announcement from retailer follows CVA last year

Advisors have blamed “ongoing financial difficulties” and challenging “high street conditions” for Select’s collapse, with abysmal market conditions now leaving the retailer unable to sufficiently deliver on a turnaround plan launched last year. Physical retailers have suffered greatly from low consumer confidence, rising cost burdens from wage and rent increases and significant disruption from online retailers, with all these factors combining to mount financial pressure on high street firms.

Select first entered into a Company Voluntary Arrangement (CVA) in April 2018, following in the footsteps of major high street retailers including House of Fraser, New Look and Marks & Spencer, after the company recorded a loss of £15.5m for the 18 months to December 2017. The move enabled the company to cut its rent costs by as much as 75% and save nearly 2,000 jobs, but ultimately proved unsuccessful as conditions for retailers continued to worsen.

Administrators to seek sale

Discussing the potential of entering a second CVA, administrators noted that the proposals would be considered alongside several alternatives, stating: “Options include a sale of the business as a going concern, in addition to entering into discussions with those parties who have already expressed interest in acquiring the business.”

29/5/19 Select seeks support for another CVA

Administrators for collapsed women’s fashion chain Select are making a last-ditch attempt to save the retailer, its 169 shops and its 1,800 employees. The CVA launched on Tuesday by Quantuma is the retailer’s second this year. The restructuring process, if backed by landlords, will be used to secure lower property costs for the chain; however, if landlords vote against the CVA, and no buyer is found for the business, it is likely to cease trading altogether, according to administrator Andrew Andronikou.

9/7/19 Update

Creditors of collapsed fashion retailer Select, which include landlords and HMRC, claim to be owed £53.1m as part of the firm’s administration.

Documents show claims of more than £2.3m from HMRC, including £1.7m in relation to unpaid VAT.

more retail CVAs predicted

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Are you owed money by a retailer?

With pressures on the high street it is essential that you stay on top of the credit limits you grant retailers and watch carefully for any late payments.

You can’t just assume your customers can and will pay you, no matter how big their name is.

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See the section below – About CPA.

Are you also at risk of collapsing?

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If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

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CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

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Read our blog here on how to crack down on the late payment culture.

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About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply to retailers like Select or small ones, help us help you identify the risks.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

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