LONDON, United Kingdom — LN-CC, the London-based fashion retail concept that combines an experiential retail store with an online operation (thought to generate a significant percentage of overall sales), announced today that it has inked a deal with Milan-based e-commerce specialist The Level Group, after being put into administration last week.
LN-CC’s highly-respected founder John Skelton, who trained as a buyer at Selfridges, Harrods and Oki-ni, will stay on as the creative director of the company, which has been re-formed as a new legal entity wholly owned by The Level Group. The news follows a similar development, last November, at London-based fashion e-tailer My-wardrobe.com, which was also bought out of administration after its founders departed earlier in the year.
It’s a surprising turn of events for LN-CC, which had seen double-digit growth in revenue each year since Skelton launched the progressive multi-channel retailer in 2010. In the intervening years, LN-CC became widely known for its progressive buys, stocking rising talents like Lucas Nascimento and Yang Li, alongside established luxury players like Lanvin and Givenchy.
“We had explosive growth from the first year, really over the last three years. But with double-digit growth, it kind of got to a point where cash flow was becoming so tight that it was becoming impossible to get the product in on time,” Skelton told BoF. Indeed, the company has previously spoken openly about being slow to pay designers for merchandise.
LN-CC turned over £5.5 million (about $9.2 million) in 2012 and had forecasted turnover of £7 million last year — a projection that it never hit. “That combined [with cash flow management] just left a hole, which we were struggling to fill,” said Skelton. Overambitious global expansion, for which LN-CC took £2 million of investment in mid-2012, also added to the company’s financial struggles.
“We started this whole thing as a group of younger fashion-forward individuals that wanted to do something different and, unfortunately, we didn’t have the same kind of backbone and support for financial structuring, logistics, fulfilment… we’ve never really nailed the actual business side of our offer,” said Skelton.
“[There was] too much focus on growth and significant overbuying,” said Andrea Ciccoli, co-founder of The Level Group. The company has worked with brands like John Galliano and Stuart Weitzman on their e-commerce businesses. Ciccoli himself is no stranger to turnarounds, having once been appointed by the Italian government to restructure and auction off the assets of bankrupt fashion brand Gianfranco Ferré.
Ciccoli firmly believes in the store’s multi-channel approach and distinctive identity. “LN-CC is like a brand in retailing,” he said. “The production values are high and the styling is strong. The store concept is very interesting. I think it’s very interesting to combine the two — I think it expresses the brand well. I don’t see why it shouldn’t be this way. We will look into expanding and developing it.”
Skelton stressed that LN-CC’s core proposition would remain the same: “From the creative side, whether it’s output, product, ideas, I don’t think anything’s going to change. It just means that we will be backed by a slicker operation, a machine that works.”
Indeed, The Level Group’s financial support and operational expertise, combined with Andrea Ciccoli’s experience with turnarounds and Skelton’s successful track record as a buyer, may help breathe new life into LN-CC.