Mike Ashley’s USC business is preparing to go into administration after a notice of intention to appoint was filed at the High Court on Tuesday. Documents show they were in debt to the clothes brand Diesel and were unable to pay them back last month as they are making significant losses. Other brands, like Adidas, have also had problems with the retailer in the past.
Owned by Sports Direct since 2011, the USC brand employs over 1,000 employees in 90 stores across the UK. With the retailer entering administration as soon as next week, hundreds of jobs will be at risk. It has been reported that employees at the Ayrshire warehouse have already been told they will be made redundant but were given no reason. It’s predicted that a third of stores will close with the rest staying open to continue trading – this will likely be the best solution for creditors while administrators, Duff & Phelps, oversee the procedure.
There may be a chance that a buyer can be found for all or part of the business assets which would save jobs and keep the business running. From Tuesday the company has 10 days before having to declare insolvency. UPDATE 16th January – USC has been bought out by Republic.com Retailed Limited (owned by Sports Direct) as a going concern. Philip Duffy and Geoffrey Bouchier from Duff & Phelps and Robert Palmer from Gallagher Partnership were appointed joint administrators today. Immediately after the appointment, the business assets were sold in a pre-pack deal to Republic, a company which was actually saved by Sports Direct in 2013.
A pre-pack is the best outcome as the business can continue to trade and most, if not all, jobs can been kept on, resulting in as little disruption as possible. Reports have revealed that 88 staff have been made redundant in this case, however, the number would have been far greater if the company entered liquidation.