LONDON — The founder of high-end lingerie brand Agent Provocateur has attacked the quick sale of the business to discount billionaire Mike Ashley, calling the private equity group that offloaded the company “negligent and incompetent.”
Agent Provocateur was on Thursday sold by private equity owners 3i to Sports Direct owner Mike Ashley, who reportedly paid up to £30 million ($US36.8 million) for the business. The sale was conducted through what is called a pre-pack administration, where a buyer is found for a struggling business before it is officially put into administration and then quickly snapped up by the buyer.
The Times quoted Agent Provocateur founder Joe Corre as saying that private equity backers 3i had been “negligent and incompetent by artificially allowing a great British brand like Agent Provocateur to crash into administration.”
Corre claims that 3i intentionally let the business wilt after it began running into difficulty so that it could get rid of the staffing and debt obligations through an administration process.
Corre told the Guardian the sale is “a disgrace to British business” and said: “If this preposterous deal goes ahead with Mike Ashley, 3i and their partners are going to face a phenomenal swath of litigation actions. 3i’s reputation is going to be left in tatters. I don’t think they will ever recover from this. This is a phenomenal stitch-up.”
Corre claims to both papers that 3i and Alix Partners, who ran the pre-pack administration process, rejected a sale offer from investment firm Quadro Capital that would have protected jobs and creditors. Agent Provocateur employs 600 people in the UK, with their exact fate now unknown.
A spokesperson for 3i told the Times that it had “no role in the selection of the buyer or the process to transact the sale” and said Quadro was “unable to satisfy Alix Partners as to the viability of their offer.”
Corre, who is the son of designer Vivienne Westwood and legendary Sex Pistols manager Malcolm McLaren, founded Agent Provocateur with his then-wife Serena Rees in 1994. 3i bought a majority stake in the business for £60 million in 2007.
However, in recent years Agent Provocateur has struggled with dwindling sales, large debts, and accounting irregularities, which KPMG was hired to investigate last year.