Surf brand O’Neill and electrical chain Bang & Olufsen set to close stores
The consumer downturn has hit the aspirational end of the high street as two high-end retailers announced downsizing plans.
Boardwear brand O’Neill and upmarket electrical chain Bang & Olufsen are set to close stores.
Outdoor specialist Blacks Leisure Group is reviewing its surfwear brand O’Neill, and will close two high-profile London stores in Carnaby Street and Neal Street in Covent Garden.
It has handed the Carnaby Street lease back to landlord Shaftesbury and has instructed agent Churston Heard to sell its Neal Street lease.
It is thought both stores have suffered in the face of stronger denim brands that have been expanding.
A Blacks Lesiure spokeswoman said: ‘The two sites in London were originally taken up to showcase the O’Neill brand, but the stores have struggled to deliver an acceptable performance and have been loss-making in recent years. The decision has therefore been taken to close these two stores to improve the overall performance of our O’Neill business. The rest of the business continues to operate as normal.’
Blacks Leisure announced last month that it had discovered accounting discrepancies at its O’Neill operation and suspended Darren Spurling, managing director of the Sandcity subsidiary, which runs O’Neill.
The group said it found that accounts relating to Sandcity, which distributes and retails O’Neill in the UK, had been overstated by £2m over the past two financial years.
The outdoor specialist found the accounting problems after a review to assess the feasibility of merging its Sandcity subsidiary with its Freespirit retail business in a bid to reduce operating costs at the boardsports businesses.
Freespirit has around 40 UK stores while O’Neill trades from 15.
Electrical chain Bang & Olufsen has embarked on a property review of its 120-strong retail estate ‘to manage it in order to take direct ownership of some of the stores’, a spokeswoman said.
Up to 10 Bang & Olufsen stores will close while the management is reorganised. It is set to permanently close at least two stores – in Blackheath, south-east London, and Worcester.
Experts have said the main casualties from any downturn in retail spending will come from the mid-market, but that the high-end and budget sectors could be hit as consumers cut down on spending.
Philip Long, a partner at PKF’s corporate recovery and insolvency team, said: ‘Retailers going into administration is symptomatic of the current market. We expect to see more high-end retailers to struggle as consumers cut down on spending.’