ANOTHER of Leven’s High Street chains is facing an uncertain future.
The town’s Happit store is under threat after its parent company, Ellie Louise, which bought over the collapsed chain in 2008, itself entered administration.
Although Happit was continuing to trade in the town this week, a notice about the administration was placed on its doors and windows.
Corporate advisory and restructuring specialist Zolfo Cooper, has been appointed joint administrators of Ellie Louise Trading Limited (the Company) as a result of the it experiencing cash flow problems arising from the current challenging fashion retail environment.
This has been exacerbated, it’s claimed by the administrators, by the impact of an acquisition undertaken during 2010 that has detrimentally impacted both profit margins and cash flows.
However, the administrator did offer some good news, confirming to the Mail that some interest has already been shown by potential buyers.
Following appointment, the joint administrators will continue to trade the company with the full and ongoing support of its lenders and equity holders while exploring all possible options.
These include a potential sale of all or parts of the business.
A spokesperson for Zolfo Cooper told the Mail that the town’s branch currently employs five people.
She added: “Our first priority in this situation is to stabilise the business and identify the best possible options and we currently have a number of interested parties.
“We will issue an update as and when it is appropriate.”
Graham Wild, partner at Zolfo Cooper said that, unfortunately, as with many other fashion retailers exposed to declining consumer spend, challenging trading conditions had led to increased financial pressure on the firm.
He added: “The company has also been adversely impacted by a number of issues arising from the acquisition of the Trade Secret brand during 2010.
“This has accentuated the cash flow strains the business has faced and meant that the director had no choice but to seek protection via an administration.
“We intend to trade the business in order to ensure that we identify the best possible outcomes regarding preservation of jobs, the value of the business and returns to creditors.
“As this work continues we will make further announcements as appropriate.”
Happit, a company formed in Dunfermline, went bust in 2008 and was bought by Second Thoughts.
Second Thoughts then went to the wall in 2008, when Ellie Louise took over.
Both Ellie Louise and Second Thoughts were run by the same family.