Alexon has placed its Bay Trading fascia into administration following losses reported earlier this week and the withdrawal of credit insurance.
The fashion group has appointed Deloitte as administrator to Epcoscan, its subsidiary that trades as Bay Trading. The fascia will continue trading with a view to finding a buyer.
In Alexon’s preliminary results this week, the group’s auditors raised the “material uncertainty” regarding Bay Trading’s performance in the current retail environment. In light of the uncertainty, the group’s provider of credit insurance said it has withdrawn cover for the group’s suppliers.
The move does not affect Alexon Brands, which remains profitable with an operating profit before exceptional items of £10.1m for the 53 weeks ending January 31. Epcoscan operates as a separate company and Bay Trading recorded a £7.2m loss against a £1.1m profit last year. Like-for-likes plummeted 16 per cent.
Alexon chief executive Jane McNally said: “It’s with deep sadness that we’ve reached the position we’re in today. Everyone at Bay Trading has worked very hard to try and turn it around and I’d like to thank all those who have been involved.
“Today’s decision, although incredibly difficult for us to make, does provide certainty for the group. Our remaining core Alexon Brands have a strong heritage and I firmly believe there is an exciting opportunity for them. A turnaround plan is in place and is already delivering results. It will take time, but I’m encouraged that the core Alexon Brands have delivered a resilient performance in the economic climate. I have every confidence in the future of Alexon Group.”
The board had been reviewing a range of options for Epcoscan, including a restructure or sale, but concluded that the level of potential drain on its financial resources meant Alexon Group had to withdraw financial support to the subsidiary.