Rare London goes into administration

3 August 2017

Rare London, the celebrity-backed fashion brand, has entered into administration.

They announced the company's insolvency on Facebook on the 31st July, despite joint administrators being appointed five days earlier.

This has left both customers and creditors out of pocket, and caused outrage on social media.

Who is Rare London?

 The Liverpool-based fashion label is a popular young brand with an impressive following - 115,500 followers on Instagram at last count.

It is stocked by the online store Asos, and several high street shops including TopShop and Next.

Clothing from the brand has been modelled by several including Sam Faiers (TOWIE), Lousies Thompson (Made in Chelsea) and Kady McDermott (Love Island).

 Why did they enter administration?


The business became insolvent as it was unable to pay its liabilities when they came due.

Steven Muncaster and Sarah Bell of Duff & Phelps Ltd. were appointed joint administrators on the 26th of July. They took the "unfortunate decision" to cease trading with immediate effect.

This had the regrettable result of making all 56 members of staff redundant with very little warning.

Since the announcement, the website has been taken down and the administrators have sought out third-parties who may be interested in the business and its assets. While a formal arrangement hasn't been reached, fashion site Drapers claims that some interest has been shown.

The administrators will also be undertaking a marketing exercise to identify a buyer for the business and assets of the company as a going concern, but trading will not continue during this process.

What does this mean for customers, creditors and employees?

Thousands of customers have been left without items or awaiting refunds for returned items. Several have taken to social media to complain. In some cases, their anger has been exacerbated by the 50% "Birthday Sale" which took place the week before administration was announced.

In Rare London's Facebook announcement, the brand advised customers on what they should do. They suggested:
• Contacting their bank/credit card holder or PayPal directly to check if a refund can be obtained through them.
• If customers paid with a debit card/a refund is unavailable for other methods, they are to make a claim against the insolvent estate as this balance will rank as an unsecured claim against the company.

However, as the company has many secured debts to other (larger) creditors, it seems that many if not all of these customers will not receive payments due.

Creditors are in a better position than customers, though only slightly. Hopefully, with the sale of the business and its assets, the majority will be paid.

Sam Faiers claims she has not been paid for fronting its spring/summer collection, and has decided to disassociate herself from the brand and conduct legal proceedings. She is one of the creditors most likely to be paid after the administration process is complete.

All the employees of Rare London have been made redundant. Unless a suitable arrangement can be reached by the administrators and a third party, they will not regain their jobs.