Collapse of U.K. Retailer DW Sports Puts 1,700 Jobs at Risk
Collapse of U.K. Retailer DW Sports Puts 1,700 Jobs at Risk
(Bloomberg) --
DW Sports, founded by former English soccer player David Whelan, filed for administration on Monday after the company had to close dozens of its gyms and retail stores due to the Covid-19 pandemic.
BDO LLP was appointed administrator of the U.K retailer and said all the company’s approximately 1,700 jobs are “at risk of redundancy,” according to an emailed statement.
DW Sports has already closed 25 of its 75 retail sites in recent weeks, the firm said earlier on Monday. The remainder of its sites will continue to trade during administration. While DW Fitness First gyms will be included in the restructuring, Fitness First remains a separate entity and its 43 gyms are unaffected by the proceedings, the company said.
Job losses in the U.K. are piling up, with engineering firm Senior Plc announcing a reduction of an additional 620 positions today. The rising number of insolvencies is becoming a problem for retailers’ creditors and landlords alike. HSBC said today it put aside $8 billion to $13 billion for bad loans this year, while U.K. mall operator Hammerson Plc is considering raising new funds through a rights issue.
DW Sport’s Chief Executive Officer Martin Long said in the statement, “As a consequence of Covid-19, we found ourselves in a position where we were mandated by government to close down both our retail store portfolio and our gym chain in its entirety for a protracted period, leaving us with a high fixed cost base and zero income.”
The move highlights the misery for many U.K. retailers who have seen their sales plunge after lockdown measures forced shoppers to stay at home.
“This is a worrying sign for other consumer-facing businesses who will have experienced the same challenges and could themselves be susceptible to financial distress,” said Julie Palmer, a partner at Manchester-based restructuring advisory firm Begbies Traynor, in an emailed statement.
Furnishing and fashion chain Laura Ashley, restaurant chain Carluccio’s and rent-to-own retailer Brighthouse all collapsed into administration since March. Shirt maker TM Lewin said last month it will close all its stores and cut 600 jobs.
Sky News first reported DW’s plans on Monday morning.
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