Ads
Published
May 19, 2020
Download
Download the article
Print
Text size

Cath Kidston unsecured creditors are owed £90m

Published
May 19, 2020

The partial sale of collapsed Cath Kidston has left unsecured creditors, including landlords, with an unpaid bill of about £90 million, it has emerged.


Cath Kidston


Last month, parts of the brand were sold back to its Hong Kong-based parent company Baring Private Equity Asia in a pre-pack deal, but the agreement did not include its stores.

The rescue deal, brokered by administrators at restructuring specialist Alvarez & Marsal alongside management, triggered the loss of more than 900 jobs. Just 32 roles will be retained in the UK.

Alvarez & Marsal said that a solvent sale of the business had not been possible after the challenges facing the brand, including high rents and changing consumer behaviour, were exacerbated by Covid-19.

While the brand will continue to trade online and through franchises overseas, records filed at Companies House show that unsecured creditors will be left in a precarious position.

They are owned about £90 million and are expected to receive only a small payment from the pre-pack sale, reported The Times. In fact, unsecured claims could rise “significantly” now that retail stores will be surrendered to the landlords, Alvarez & Marsal said.

The list of unsecured creditors includes trade creditors, landlords and HM Revenue & Customs.

The fact that the sale excluded Cath Kidston’s store portfolio was seen as a further blow to the embattled UK high street. Several brands will emerge from the lockdown with smaller store estates, while Oasis and Warehouse will permanently close all shops.

Copyright © 2024 FashionNetwork.com All rights reserved.