British shoe retail chains face collapse

"Stylo has faced a downturn in trading as a result of the current difficult economic and market conditions," Daniel Butters, partner at administrators Deloitte who have been drafted in to help save the chains, said.

Barratts and PriceLess together comprise 400 shops across Britain and employ a total of 5,400 people.

Stylo added that the pair were put into administration, the process whereby a troubled company calls upon independent expert financial help to remain operational, because of a sharp downturn.

"The trading conditions in the retail sector have deteriorated markedly. The board does not anticipate any improvement in the trading environment in the short-term," said Stylo, which is based in Bradford, northern England.

Stylo shares were meanwhile suspended.

"Against this background the board has concluded that current and projected sales can not support the current cost base of the business ... and therefore a more pro-active restructuring approach is required to return the business to profitability."

The British retail sector, buckling under the weight of a recession, has already witnessed the collapse of other chains including general retailer Woolworths, furniture group MFI and entertainment store Zavvi.

Earlier this month, Woolworths collapsed with the loss of 27,000 jobs and 807 stores dotted across Britain.

Britain is in recession for the first time since 1991, official data showed last week.

Gross domestic product (GDP) shrank by 1.5% in the fourth quarter of 2008 compared with the previous three-month period when it contracted by 0.6%.

The figure for the final quarter of 2008 showed the biggest fall in GDP since 1980.

The generally used technical definition of a recession is two quarters running of negative economic growth.

Source: AFP

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