A Chinese supplier to LK Bennett has stepped into the battle to buy the chain from administrators amid growing hopes that the majority of its workforce will keep their jobs.
Sky News has learnt that a newly incorporated UK company called Byland UK has been set up with he objective of acquiring LK Bennett, one of the high street’s best-known fashion chains.
Companies House filings show that the two directors of Byland UK are Feng Kangjie and Zhou Cuiqiong, whose company is understood to act as a significant supplier to the retailer from their base in the Far East.
One source said on Thursday that Byland had approached Darren Topp and Andrew Ellis – respectively LK Bennett’s former chief executive and finance director – about assisting it with its offer.
The emergence of the Chinese bid comes just days before administrators at EY are expected to secure a deal to sell the chain.
Byland has tabled the highest-value offer for LK Bennett, according to an insider, although it was unclear how deliverable its proposed transaction would be.
Alvarez & Marsal, the professional services firm, is working with Byland on its offer.
Sky News revealed earlier this week that the privately owned footwear company Dune was also involved in the bidding, while the Sports Direct tycoon Mike Ashley was reported to have made an offer earlier this month.
Last month, Linda Bennett, the chain’s founder, drafted in advisers to examine options for the chain within 18 months after regaining full control of the business.
Its collapse into insolvency came as LK Bennett joined the growing list of high street chains to be buffeted by a toxic array of financial and operational headwinds.
Ms Bennett, whose success in building LK Bennett into a widely talked-about shoe retailer, led to her being dubbed “the queen of the kitten-heel”.
In 2008, she sold a controlling stake to a consortium led by Phoenix Equity Partners, a private equity firm which is well-known for backing successful consumer-facing businesses.
That deal valued LK Bennett at £100m, although the company has endured a difficult time more recently, making pre-tax losses for several years.
Results for the year ended July 29, 2017, show the business recorded an operating loss of £5.9m.
A much larger loss of £47.9m for the same period was the result of a corporate restructuring that involved writing off amounts owed by former group companies.
Ms Bennett founded the eponymous chain by opening a store in Wimbledon, southwest London, in 1990, and promised to “bring a bit of Bond Street to the high street”.
She returned to the company, initially as a consultant, in 2017.
Her return was engineered by Mr Topp, who became a prominent figure in British retailing as the executive who ran BHS following its sale by Sir Philip Green to the serial bankrupt Dominic Chappell in 2016.
LK Bennett trades from 200 branded outlets in the UK and overseas markets including China, Russia and the US.
A series of cost pressures, including rises in business rates and shifts in consumer behaviour, have created the most volatile trading environment for the industry in many years.
The costs associated with a no-deal Brexit, including alternative supply chain routes and stockpiling of products, have also added to the financial pressure the sector.
A&M and EY declined to comment, while Byland could not be reached.‎
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