Wed, 01 Mar 2023 | ADMINISTRATION
Fashion brand Lavish Alice is restructuring as an online-only company, after its wholesale arm was placed into administration. The company’s directors stated that the move was voluntary, with significant growth at its online business, but “financial challenges” at its wholesale arm.
As a result, business advisory Quantuma has been appointed to oversee the administration of Fast Fashion Collections International Limited. Joint administrator and Quantuma Managing Director Jeremy Woodside commented: "Fast Fashion Collections International Limited is a wholesale, retail and online fashion retailer which hit financial difficulties as a result of the slow COVID trading period.”
"Despite year end results for 2022 showing a substantial increase in sales and revenue, the business was struggling with historic liabilities sustained during the pandemic and increased trading costs post COVID.”
During 2022, the wholesale arm generated revenue of over £5 million, through partnerships with retailers including SAKS, ASOS, Bloomingdales, Selfridges, Harvey Nichols, Tessuti and others. The company’s gross revenue was in excess of £17 million.
Despite the wholesale arm’s stronger performance last year, Lavish Alice said that the business had “grappled” with issues including supply chain disruption, wholesale cancellations, squeezed profit margins, late delivery charges and rising freight costs, which had led to “financial challenges”.
The company added that its e-commerce business, by contrast, has "experienced significant growth and revenue continues to thrive", leading to the decision to streamline as an online-only retailer.
Lavish Alice co-founder Matthew Newton commented: "Demand for the brand and website sales are at a record high with revenue up +71 per cent year-on-year and +76 per cent pre-pandemic levels, across 100,000 transactions. The results are exceptional, and we’re excited to showcase our new SS23 RTW collection next week.”
"We took the difficult decision to prioritise our ongoing efforts and resource into the most profitable part of the business. Our 'online-only' and 'online exclusive' proposition will bolster our D2C growth even further, with customers naturally crossing to us directly from our wholesale partners.”
"Wholesale margins became increasingly squeezed and harder to service. When carefully balancing their financial penalties, order cancellations, marketing contributions, early settlement discounts along with increased cost of sales and lower margins, it became an impossible challenge. Our resource is best placed maintaining the record growth of pureplay.”
"The brand is now able to move forward with a renewed focus on our 600,000 strong D2C client list and we remain in a robust position to deliver on our significant growth plans for 2023."
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