Jack Wills lenders hire advisers amid retail strain

Lenders to "preppy" fashion retailer Jack Wills have drafted in advisers to scrutinise the chain's finances amid expectations that it will require a further cash injection within months.

Sky News has learnt that Jack Wills' lenders, who are led by the high street bank HSBC, have appointed EY, the accountancy firm, amid the broader retail downturn which has cost tens of thousands of jobs.

Sources said that EY had been brought in partly to help negotiate revisions to Jack Wills' borrowing covenants, as well as to examine the company's wider ongoing financing requirements.

The appointment of advisers to its lenders comes just weeks after Jack Wills was handed a £20m boost from new and existing shareholders.

An Italian family office which is an investor in Jack Wills' existing shareholder, BlueGem Capital Partners, and BlueGem itself provided roughly equal sums to the company in the form of a debt instrument late last year.

The new Italian investor had stepped‎ in following the withdrawal from talks of Searchlight Capital Partners, the private equity group which owns the Hunter boots brand.

Jack Wills has endured a torrid few months in its boardroom, with its co-founder, Peter Williams, being pushed out of the business nearly 20 years after he launched it.

Suzanne Harlow, a former Debenhams (Frankfurt: D2T.F - news) executive, is replacing Mr Williams as chief executive, while the retail veteran Rob Templeman is advising on a turnaround plan.

The fashion brand has been hit by sterling's weakness, and has come up with an alternative sourcing plan that will lead to cheaper overseas production.

Jack Wills trades from more than 90 stores, with four shops understood to have opened in the last week.

Last autumn, the retailer was reported to be examining plans to use a controversial insolvency mechanism to close significant numbers of stores, although that idea is since said to have been relegated to the back-burner.

People close to the company said it was unlikely to release a detailed Christmas trading update, a decision that may fuel speculation about its trading performance.

A Jack Wills spokesman declined to comment on Tuesday.

The talks with lenders come during a period of continuing turmoil for the high street, with New Look being forced into a debt-for-equity swap this week to slash its borrowings.

Debenhams, meanwhile, is working on a financial restructuring that would involve shedding scores of stores and thousands of jobs.

Marks & Spencer (Frankfurt: 534418 - news) is also continuing to pursue plans to reshape its store estate, confirming on Tuesday the locations of 17 further shops that will close as part of a programme originally announced more than two years ago.

Administrators to HMV, the music and entertainment retailer, have set a deadline of Tuesday for offers for the company, which collapsed last month.