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Coast – Brief Background and History


Coast is a High Street clothing retail chain for women founded in 1996 in the UK. While the mid-1990s was predominantly about casual clothing, the company specialised selling women’s dresses. The fashion business model later on became successful and grew at its peak to more than 30 standalone stores in the UK, Ireland, Kuwait, UAE, and a hundred concessions around the world, with over 1,000 employees.

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High Street Crisis

Along with fashion brands such as Warehouse and Oasis, Coast is one of the companies owned by Aurora Fashions, which specialises in women’s fashion brands. Aurora Fashions, which is owned by Kaupthing Bank, has been in administration for some time. On the other hand, Kaupthing was reported in November 2016 to be offering for sale the three brands for a total of £100 million valuation. Kaupthing has been making an effort to sell its fashion interests, which were inherited from Icelandic investor Baugur during the financial crisis.

Coast had not been faring very well amidst the High Street crisis, reporting only a pre-tax profit of £1.3m in 2016. In 2017, UK-based news magazine – Retail Week speculated that High Street brands like Coast would do better in online and store concessions, rather than stand-alone stores.

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Karen Millen Acquisition

British retailer Karen Millen, which also happens to be owned by Kaupthing Bank, bought the website, online store, and concessions in department stores of the Coast brand when the latter went to administration on 11 October 2018.

PricewaterhouseCoopers (PwC) were the appointed administrators that assisted the company during the said financial difficulty. According to PwC, the financial difficulties were due to structural challenges in the retail space, particularly the concession partner market, and the decline in demand for occasion wear.

Through its acquisition, Karen Millen was able to save about 600 employees, but leaving 300 employees unemployed with the closure of 24 standalone stores both in the UK and overseas. The 145 department-store concessions continued its operations under Karen Millen.

Karen Millen assured that through its acquisition, Coast will turn out to be profitable based on the former’s expertise in retail fashion, and through the transformation of Coast to a leaner business structure. However, Karen Millen’s Australian arm would later fall into administration, resulting to a closure in the UK of 32 stores including 117 concessions.

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Boohoo Acquisition

In a pre-pack administration deal, Boohoo Group plc acquired Karen Millen and Coast in August 2019 for 18.2 million pounds. The original plan was for the two brands to continue its operations through their 32 stores and 177 concessions across the country while the administration process is taking place.      Boohoo later on decided to just acquire the online business and the intellectual property rights of Karen Millen and Coast. The Boohoo acquisition was based on Deloitte’s advice, through Rob Harding, to sell Karen Millen and Coast to the online retail company.

According to report from Boohoo, revenues for both Karen Millen and Coast total­ed 174.1 million pounds for the financial year up to February 2019; 28.4 million pounds of which were from direct online sales. Boohoo was optimistic that the adult female fashion brand would complement its current portfolio of young fashion which includes MissPap, Nasty Gal, and PrettyLittleThing. Boohoo was reported to be investing into scalable multi-brand platform to increase its share in the international fashion e-commerce.

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Shift to Online Retail

The disruptive online retail shopping and the socio-economic factors in Europe are the relevant factors that brought down, not just Coast, but the retail sector in general. 2018 was the UK’s worst year for its retail sector, resulting in a loss of 85,000 jobs due to business closures.

To aggravate these factors, acquisitions did not appear to favour Coast, as its previous parent company – Aurora Fashion, and Karen Millen, both fell into administration, despite the latter’s attempt in creating a leaner business structure by eliminating standalone stores and retaining only online channels and department store concessions.

In hindsight, Coast may have been able to survive these disruptive economic factors if it was able to transition its channels from High Street to online retail at an earlier time. For Karen Millen’s former husband and co-founder Kevin Standford, Boohoo would perform a better job in keeping the fashion brand profitable than Kaupthing Bank. Only time would tell if the Boohoo acquisition would work in its favour and the brands.

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