Links of London, a renowned British jewelry brand, has been in the news recently for all the wrong reasons. Rumors are rife that the company is going bust, leaving many customers and stakeholders concerned. In this article, we will explore the reasons behind these rumors and whether Links of London is indeed on the verge of collapse.
What led to the speculation?
The first sign of trouble for Links of London came in October 2018 when its parent company, Folli Follie, was accused of fraud by an activist investor. The Greek company was alleged to have overstated its revenues and profits, leading to a massive drop in its share price. As a result, Folli Follie’s creditors started calling in their debts, putting immense pressure on the group’s subsidiaries.
Links of London was one such subsidiary that found itself struggling to stay afloat. The company had already been facing financial difficulties since 2017 when it reported losses of £20 million. Its sales also declined by 12%, which forced it to close several stores across Europe and Asia.
What’s happening now?
In August 2019, Links of London appointed Deloitte as administrators to oversee its operations amid mounting debts. The move resulted in the closure of all its UK stores except for those located at airports. About 350 jobs were lost as a result.
Despite this setback, there were hopes that Links of London would be able to bounce back under new ownership. However, these hopes were dashed when it was announced that Hong Kong-based fashion retailer Ou Rui Limited had bought only certain assets and intellectual property rights from Links of London’s administrators.
As a result, Links of London’s creditors are unlikely to recoup their losses fully. Some experts have opined that this could lead to legal action against Folli Follie and even Deloitte over their handling of the situation.
Conclusion
In conclusion, it is clear that Links of London has been going through a rough patch for some time. The rumors of its imminent collapse are not entirely unfounded given the company’s history of financial difficulties, store closures, and administration. However, it is also important to note that the brand’s intellectual property rights have been acquired by Ou Rui Limited, which could potentially revive it in the future.
The key takeaway here is that businesses need to stay vigilant and adapt to changing market conditions to survive. Links of London’s downfall serves as a warning to other companies that complacency can be fatal in today’s highly competitive environment.