LONDON — Agent Provocateur, the upmarket lingerie chain that went into administration earlier this year, is set to leave unpaid debts to suppliers and other businesses of around £20 million.
A filing with Companies House from the chain’s administrator’s Alix Partners shows that unsecured creditors are owed £20.7 million.
However, Alix Partners estimates that there will be just £600,000 recovered from the business to cover their debts, meaning unsecured creditors will recover just 2.9p in the pound. The shortfall was first reported by the Times.
Agent Provocateur, founded in 1994 by Joe Corre and his then-wife Serena Rees, was a hugely popular luxury lingerie brand in the 2000s but fell into difficulty last year “following a downturn in the wider market and the discovery of accounting irregularities in August 2016,” Alix Partners’ report says.
The company’s private equity owner 3i tried to sell the business at the end of last year but couldn’t find a buyer willing to take on Agent Provocateur’s debt. In the end, it was sold through a pre-pack administration, a controversial form of administration that lines up a buyer for the business before it is officially in administration. Four Holdings, a company backed by Sports Direct billionaire Mike Ashley, purchased Agent Provocateur in the deal for £31 million.
Agent Provocateur’s biggest unsecured creditor is thought to be 3i, the private equity company that bought the chain in 2007 for £60 million. £15.3 million of the unsecured debts are to inter-company creditors and Alix Partners report says 3i provided “significant further funding to the group on an unsecured basis between August 2016 and January 2017.”
However, the group has 444 unsecured creditors in total, including a Moroccan garment manufacturer that is set to lose over £500,000. Vogue publisher Conde Naste is also owed close to £40,000, likely for advertising, and ad agency Saatchi and Saatchi is owed over £65,000.
Microsoft is owed almost £100,000 and other businesses with debts to claim include The Ivy restaurant, the Dutch office of Elite Model Management, and hotel Citizen M, whose Bankside branch is owed over £50,000.
While unsecured creditors are set to lose the bulk of money owed, Agent Provocateur’s biggest secured creditor, Barclays, is set to suffer only a “small” shortfall of the £28.2 million it is owned, Alix Partners say. The bank will swallow the bulk of the £31 million paid for the business.
76 of Agent Provocateur’s 238 employees are transferring to Four Marketing as part of the pre-pack administration sale. Alix Partners say they expect some preferential claims to be made by employees that are not transferring to the new owner, likely looking to recover pay and benefits such as pension payments.
Founder Corre, who is the son of designer Vivienne Westwood and legendary Sex Pistols manager Malcolm McLaren, was highly critical of the sale to Four Marketing last month, accusing 3i of being “negligent and incompetent.”
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