19th May 2020
In the news today we discover that Cath Kidston creditors, including HMRC, landlords and gift cards, are owed £90 million after administration.
Documents filed at Companies House by the appointed administrators from Alvarez & Marsal indicate unsecured claims of over £90m and state that ''as the retail stores will now be surrendered to the landlords the level of their claims could rise significantly when loss of rent and dilapidations claims are made.''
The exact dividend amount for unsecured creditors is yet to be confirmed as the realisation of assets and payment of associated costs is still underway.
21st April 2020
The owner of Cath Kidston, Baring Private Equity Asia, is buying its brand, e-commerce platform and wholesale and franchise businesses from administrators.
This deal goes by the insolvency process known as a pre-pack administration.
Its entire retail store network, made up of 60 UK stores will cease as the confirmed deal only included saving the online business. Just 32 of its 940 staff will see their jobs secured.
Baring Private Equity Asia have been a shareholder of the modern retailer since 2014, before taking full control in 2016.
Melinda Paraie, CEO shared her delight that the future of Cath Kidston had been secured whilst thanking all employees for their hard-work, loyalty and patience amid the situation. She then said: ''We now look to the future and are focused on transforming Cath Kidston into a brand-first, digital-led business with a continuing mission to brighten customers’ lives with our much-loved, British-inspired prints and designs.''
A spokesperson for Baring Private Equity Asia said: “While we are disappointed that the COVID-19 crisis has resulted in the cessation of the retail store network and impacted many employees, we are pleased to have secured a future for a number of Cath Kidston staff and the Cath Kidston brand in the form of a viable digital business. Going forward we will continue to help the company grow through its e-commerce platform and international wholesale and franchise businesses.''
4th April 2020
Vintage retailer Cath Kidston becomes the latest high street name to file a notice of intention to appoint administrators.
Sky News reported on the matter.
This move comes just two weeks after Alvarez & Marsal were instructed to find a buyer for the business – owned currently by Baring Private Equity Asia. It is said that a number of credible parties share interest in a takeover. The sale process is ongoing.
A spokesperson for the modern-vintage retailer said: ‘’The notice of intention forms part of the process by which Cath Kidston is continuing to work with Alvarez & Marsal to explore all options for the company in the current climate.’’
The notice of intention does not mean that it will be automatically a collapse into administration for Cath Kidston. It just gives the company ten days of breathing space from creditors, a moratorium period.
Cath Kidston, famous for its floral and polka dot designs, employs around 800 people and trades from 60 stores in the UK (over 200 globally). The globally recognised brand, trading since 1993, sells fashion, homeware and accessories.
In the last two financial years more than £27m has been lost for the brand, with a further £11m loss before interest, tax, depreciation and amortisation in the nine months to December.
A pre-pack administration is the most likely option, insiders say.
A turnaround strategy by new CEO, Melinda Paraie, began to work before the coronavirus pandemic; a number of shops were closed and 40% of staff were axed, slashing operating costs.
This filing comes not long after department store Debenhams hit the news for being on the verge of appointing administrators for the second time in a year. COVID-19 is really having an effect on businesses as seen by Laura Ashley, Carluccio’s and BrightHouse collapsing.