Fashion retailers Oasis and Warehouse are preparing to enter administration - placing about 2,300 jobs at risk.

The chains are expected to appoint auditor Deloitte to handle the insolvency process.

Why are the chains entering administration?

The news comes amid an uncertain time for many businesses across the UK, after being forced to close to customers due to the coronavirus outbreak.

Both Oasis and Warehouse are expected to appoint Deloitte to handle the administration on Tuesday (April 14) or Wednesday (April 15), Sky News has reported.

The Oasis and Warehouse Group began discussions with prospective buyers three weeks ago, following an approach from an unnamed company.

There is understood to have been strong interest in a deal, but the coronavirus pandemic is believed to have made a solvent sale impossible to conclude.

Talks are now expected to continue with potential bidders after the appointment of Deloitte is confirmed.

Currently, the companies traded from nine standalone stores and 437 concessions in department stores, including Debenhams and Selfridges.

What will happen to employees?

A total of 2,300 jobs will be put in jeopardy when the stores enter administration.

It is expected that the administrators will put the majority of employees who keep their jobs on furlough, as part of the government’s emergency Coronavirus Job Retention Scheme.

Retail expert reaction

Andy Barr, retail expert and co-founder of online price tracking website Alertr.co.uk said: “Here are another two popular clothing retailers that join the long list of those expecting or already going into administration.

“It seems that despite the help from the government that has been offered to those struggling with the ramifications of the Covid-19 pandemic, it just isn’t enough to keep these particular companies afloat during lockdown. 

“With the majority of Britons currently only leaving their homes for daily exercise or for food shopping, the purchase of summer wardrobe essentials is highly unlikely to be at the forefront of customers minds, especially as the notion of a summer holiday abroad isn’t looking great.

“That, coupled with the fact that so many are facing job losses and financial instability, means that high street retailers like Warehouse and Oasis, who were already struggling beforehand, are now facing the final curtain call. 

“It will be interesting to see how the more traditionally popular brands like Topshop, H&M and River Island fare in the coming weeks.

“Can their large social media followings and younger target demographics keep them safe when it comes to their online offerings or could they ultimately be heading for a similar fate? Only time will tell.”

Have any other stores entered administration during the pandemic?

On April 9, Debenhams confirmed that it has formally entered administration for the second time this year, after being hard hit by the current coronavirus lockdown.

The department store has appointed administrators from the FRP Advisory to oversee the process, following a notice of intent to appoint administrators on April 6.

Debenhams made the decision to enter administration in an effort to protect both the business and staff during the current lockdown, with the intent to resume trading once restrictions are lifted.

The retailers’ 142 locations across the UK remain closed, in line with government guidance, with the majority of its 22,000 staff currently on furlough.

Debenhams said it will work to reopen and trade in as many of its stores as possible.

However, its Irish business, which runs 11 stores with around 1,400 staff, will cease trading as part of the move.