Yesterday’s news that Mike Ashley had snapped up fancy lingerie chain Agent Provocateur raised a few eyebrows.
Respected retail watchers including Nick Bubb and our own Luke Tugby argued that, rather than making a swoop for lacy knickers, Ashley should be concentrating on getting his embattled Sports Direct back in order.
But the plot thickened today, when Agent Provocateur founder Joe Corré condemned the deal.
He branded it “a disgrace to British business up there with Sir Philip Green’s shocking behaviour over BHS”, and threatened to land Ashley and private-equity fund 3i with “a phenomenal swath of litigation actions”.
As well as being distressed that his high-end brand has fallen into the hands of Ashley – who predominantly operates at the opposite end of the market – Corré has thrown into question the ethics of pre-pack administration deals in modern retailing.
As Agent Provocateur was placed into insolvency directly before the sale, Ashley was able to immediately seize its assets – with debts to creditors and the taxman being wiped out.
But pre-packs are not uncommon. Many businesses, such as Dreams, have been through pre-pack deals and, with significant owner investment and new management, have come out the other side – better than new.
So while pre-pack administrations can have controversial beginnings, it doesn’t mean there can’t be a happy ending.
Elsewhere today, Gear4music full-year sales hit a high note as the specialist online retailer aggressively expanded its distribution network.
Quote of the day
“Whilst continuing to invest in the future growth of the business, we have closely managed our costs and the board is now confident of delivering profits for the year marginally ahead of our increased expectations signalled in January”
– Gear4music chief executive Andrew Wass commenting on the etailer’s full-year results
Today in numbers
The number of orders John Lewis will track across more than 350 suppliers using new order tracking technology
The jump in Gear4music’s like-for-like full year sales
Next week’s agenda
As the City sleeps at the weekend, happy trading from us here at Retail Week.
Emily Hardy, senior reporter