Koovs PLC (LON: KOOV) have updated the market on Tuesday afternoon, saying that they have been placed into administration.
Koovs have seen a mixed few weeks of trading, and shares have been volatile. In November, the firm saw its shares sink amid talks between shareholders over a potential financial investment.
The India focused online fashion retailer said that it continued to negotiate with major shareholder Future Lifestyle Fashions Ltd (NSE: FLFL) for completing its £6.5 million investment.
Future Lifestyle Fashions is a subsidiary of Indian retail giant Future Group (NSE: FRETAIL).
Today, the firm has given a bleak update to shareholders as Future Lifestyle have failed to invest more money into the company.
Koovs said Future Lifestyle Fashions, part of India’s largest retail group Future Group, failed to fulfil a contractual commitment to invest a further £6.5 million into the company.
“The board expects that the business and assets of Koovs will be purchased from the administrator by a company connected to the company’s largest secured creditor, Waheed Alli, ensuring the continuation of the operating business,” the company said.
“If a replacement nominated adviser is not appointed within one month, the admission of the company’s securities will be cancelled on AIM. The company has no current intention of appointing a replacement nominated adviser,” Koovs added.
Koovs follow UK clothing firms who have seen a period of volatility in their share price. Similar to Koovs, women’s clothing retailer Laura Ashley saw their shares crash in October after the firm saw their finance chief depart.
In a public statement, Laura Ashely said “The board would like to take this opportunity to thank Mr Anglim for his contribution during his tenure with the company and to wish him the very best for the future,”
Additionally, the clothing department of Marks and Spencers saw their profits take a tumble in November, which was contributed in their clothing department.
Chief Executive Steve Rowe alluded to several factors which had caused the slump including blamed the 5.5% decline in like-for-like clothing sales in the first six months of its financial year on supply chain problems and buying errors that meant popular sizes quickly sold out in store and online.
The future certainly looks bleak for Koovs, and efforts will need to be directed in order to ensure a recovery is made in an increasingly tough operating environment.
