Case study

Project Retail: Pre Pack

“Fashion writers call the deal miraculous"

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In July 2023, FTS Recovery came to the aid of sister companies in the fashion world. One was a high-end retailer, the other, more affordable and accessible. The result was the same for both, as FTS swiftly rescued both businesses with an acclaimed, pre-packaged administration.

FTS’s Marco Piacquadio and Alan Coleman were appointed as joint administrators and immediately set to work. They tirelessly organised a refinance agreement against the secured debt, which resulted in all secured creditors receiving full repayment. Marco and Alan were hailed as heroes, with fashion writers calling the deal “miraculous”. Luckily, the news didn’t reach the media while the deal was being worked on.

It’s rare for high-end fashion retailers to enter formal insolvency arrangements. And in this case, the high-end client’s list was considered a tangible asset and could form part of the financial evaluation. The high-end brand has regularly featured in London Fashion Week and even worn by the likes of Alexa Chung, Cate Blanchett, Michelle Obama and the Duchess of Cambridge. So, the FTS team had to ensure they protected such a valuable client list. 

During the deal, Marco and Alan were able to organise the refinance which allowed them to continue to remain in talks with third-party suppliers. 

Pre-packs are an arrangement where part or all of a company’s business and/or assets are negotiated and agreed before an insolvency practitioner can formally be appointed. On appointment the business and/or assets are immediately, or shortly after, sold. Hence the quick work.  

There are other benefits with such a deal. The value of the business and/or assets are less likely to fall, because a sale is negotiated prior to a formal insolvency. Business continuity and reduced costs are also likely, since there are no insolvency trading costs associated. 

However, key to the success of cases such as this is the historical knowledge of the industry, because you need to know where to find buyers. Fortunately, FTS Recovery have experience in clothing restructuring matters, having worked on cases such as Monsoon Accessorize, Julien Macdonald Ltd and JTF Wholesale Twinset. 

This case saw Marco and Alan work with both high-end and high-street labels. The sister company was created and founded by a Scottish designer who has worked as a fashion designer for more than 16 years. His high-end brand has produced clothes worn by celebrities at the Met Gala as well as the designer taking on the role of Creative Director at Donatella Versace’s sister company Versus. In 2013 the company sold a 51% stake but the designer bought it back in 2018. The impact of the pandemic was hard and in 2020 at its height, the business closed its flagship London store and laid off a significant portion of staff. 

Meanwhile, the sister company, which sold high-street style items such as t-shirts, sweatshirts and phone cases, saw its sales quadruple that year – making up more than half of all sales through the online channels. 

Marco highlights the importance of the pre-packaged sales, which “provided creditors with a significantly higher return than the alternative of liquidation, whilst all staff redundancy payments and any salary arrears are covered by the Government’s redundancy payment service.” 

Alan points out why it’s not unusual for brands to go under in the current economic climate. “Retailers are being squeezed at both ends, with inflationary pressures compounding recent rate revaluations on trading premises as well as rising energy costs, together with discretionary spend being reduced by the end consumer.”


Marco Piacquadio Director - Head of FTS Recovery
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