Lakeland owner Hilco and Dragons’ Den judge Touker Suleyman have both joined the growing list of suitors vying to salvage fashion accessores brand Claire’s out of administration.
Suleyman, who owns menswear brand Hawes & Curtis and womenswear label Ghost, tabled a bid to rescue the brand and has reportedly pledged to retain its head office staff and keen a significant chunk of its more than 300 UK and Ireland store estate intact, according to Sky News.
It comes hours after Retail Week revealed that Lakeland backer Hilco had renewed interest in the stricken retailer, just weeks after walking away from an auction to buy Claire’s before it collapsed into administration.
Hilco and Suleyman join a growing list of suitors for the stricken fashion accessories business, after it was reported over the weekend that Modella Capital and HMV owner Doug Putnam had both tabled bids for Claire’s in recent days.
A City source said any deal for Claire’s UK and Ireland could potentially be reached for as little as £1, due to its complicated financial ties to its now bankrupt US parent company.
“It’s all a bit of a mess,” they said. “The intercompany position between the UK and US has sizeable loan notes, which may need to be unwound or, at best, be written off.
“They have an ABL [asset-based lending] facility, which at best will be unwound; at worst, the banks and lenders will take a hit. They have little cash on the balance sheet, they’re barely profitable, loads of outstanding leases, and while they have a decent amount of stock, in a distressed sale, that isn’t really worth much. It’ll be pennies in the pound.”
Claire’s UK and Ireland fell into administration on August 13, putting 2,150 jobs at risk. Administrators Interpath were appointed the same day and said they would “assess options for the company” and look to sell the business to “secure a future for this well-loved brand”.
Since going into administration, the retailer’s 306 stores across the UK and Ireland have remained open and continued trading. Its staff have also remained in post.
Any buyer for the business would likely have to undertake a significant restructuring of the business, with only around 100 of its stores considered to be profitable.
The US and Canadian arms of Claire’s were bought out of bankruptcy on August 20 by private investment firm Ames Watson, after it collapsed into Chapter 11 protection, revealing liabilities of about $690m (£513.4m).
Claire’s chief executive Chris Cramer blamed “increased competition” for the demise of the brand.
“This decision, while difficult, is part of our broader effort to protect the long-term value of Claire’s across all markets,” he said.
“In the UK, taking this step will allow us to continue to trade the business while we explore the best possible path forward. We are deeply grateful to our employees, partners and our customers during this challenging period.”
Will Wright, UK chief executive at Interpath, said last month: “Claire’s has long been a popular brand across the UK, known not only for its trend-led accessories but also as the go-to destination for ear piercing.
“Over the coming weeks, we will endeavour to continue to operate all stores as a going concern for as long as we can, while we assess options for the company.
“This includes exploring the possibility of a sale which would secure a future for this well-loved brand.”
Interpath declined to comment on its discussions with prospective buyers of Claire’s. Hilco declined to comment.
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