More than 1,000 jobs could be at risk after fashion firm Boohoo bought out the online businesses of UK brands Karen Millen and Coast.
The buyout, worth £18.2 million, does not include brick-and-mortar stores. As a result, the two firms’ 32 high street stores and 177 concessions are set to close, with 1,100 jobs due to be axed.
It is believed that the high street shops will continue to trade for a few months before the close for good. A total of 62 staff members will be made redundant immediately, but the future of the rest of the staff remains uncertain until a known closure date for the shops is given.
62 immediate redundancies
Boohoo bosses have said that the purchase of Karen Millen and Coast will help the company, which already owns the likes of PrettyLittleThing, Nasty Gal and MissPap, gain more customers in the online fashion market.
Chief executive John Lyttle said, "The acquisition of the online business of two great and renowned British brands in Karen Millen and Coast represents another milestone in the group's growth story as it continues to invest in its scalable multi-brand platform and gain further share in the global fashion e-commerce market."
High street brand Karen Millen, which has been making losses for the last two years, was put up for sale by its Icelandic owners in June.
Coast is believed to have struggled because of its position in Debenhams stores, which have also faced their own struggles of late.
Boohoo is enjoying a jump in sales
Both firms were put into administration on Tuesday (6 Aug) and bought up together by Boohoo in what is known as a pre-pack deal.
Boohoo revealed a 39 per cent jump in sales in the three months running up to May 31.
The firm, founded 14 years ago in Manchester, has around 13 million active customer accounts globally across its existing brands.