More than 900 jobs are to be axed with immediate effect at retro retail label Cath Kidston after the company said it was permanently closing all 60 of its UK stores under a rescue deal with its Hong Kong-based owner, Baring Private Equity Asia.

The vintage-inspired fashion label will continue trading online and via its wholesale and franchise businesses around the world, which includes more than 100 stores. A total of 908 staff will be made redundant

Thirty-two jobs will be saved under the rescue deal – known as a “pre-pack” – which involved putting Cath Kidston into administration under advisory firm Alvarez & Marsal and then re-emerging as a much smaller business.

Melinda Paraie, the chief executive of Cath Kidston, said: “While we are pleased that the future of Cath Kidston has been secured, this is obviously an extremely difficult day as we say goodbye to many colleagues. Despite our very best efforts, against the backdrop of Covid-19, we were unable to secure a solvent sale of the business which would have allowed us to avoid administration and carry on trading in our current form.”

Cath Kidston warned it was set to call in administrators earlier this month after Baring failed to find a buyer for the brand, which opened its first store in 1993.

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A string of fashion chains including Oasis, Warehouse, Laura Ashley and Debenhams have called in administrators in recent weeks as the government imposed shutdown of non-essential retail has added to existing pressures from rising costs, the shift to online shopping and low consumer confidence.

Richard Fleming, at Alvarez & Marsal, said: “Like every retailer, Cath Kidston has faced significant challenges in recent years, including high rents and changing consumer behaviours. These challenges have been exacerbated by the outbreak of Covid-19, which has been impacting the business globally since the beginning of the year.”

The company employed 941 people in the UK, 820 of whom were furloughed on 22 March under the government scheme.