Childrenswear retailer in danger of breaching banking covenants
Struggling childrenswear retailer Adams is in danger of breaching its banking covenants if it fails to find a buyer by the end of the month.

In its accounts made available at Companies House this week, Adams said: 'As a result of recent trading results, the company may not have sufficient finance to meet its obligations as they fall due and there is uncertainty as to whether the covenant requirements attached to its borrowings, which apply at the end of January, will be met.'

It is understood that retail restructuring specialists including Hilco and Gordon Brothers are circling the retailer for a potential break-up of the business, which was put up for sale over Christmas.

However, there is also believed to have been some interest in the chain as a going concern. US chain Carters has been linked to the company, but this week denied any involvement to Retail Week.

Sources close to the situation said that the value of a deal is likely to be between£15 million and£25 million, way below the original mooted figure of£50 million. One source who assessed the business said: 'More than 100 of its 300 stores would need to close to make the business profitable.'

Adams unilaterally shifted its rent payments from quarterly to monthly in December and some landlords are thought to have seized stock in lieu of unpaid rent.

Last week, the retailer said sales had improved, with like-for-likes at Adams' UK stores up 8.6 per cent for the four weeks to December 30.

Adams declined to comment.

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