The pre-pack administrations unveiled by Monsoon Accessorize and Quiz this morning were certainly portrayed as good news for the businesses and their respective workforces.
Jobs and stores will be saved under the two deals, both of which allowed existing owners and management – Peter Simon and Tarak Ramzan respectively – to carefully cherry-pick the parts of their struggling businesses that they wanted to buy out of administration.
Although the potential alternative to a pre-pack is for firms to disappear entirely, it has always been a controversial insolvency process. Those that involve current owners, rather than a third-party buyer bringing in fresh thinking and funding, have never sat right with me.
Monsoon Accessorize and Quiz both blamed coronavirus for their pre-pack administrations – and, admittedly, the impact of lockdown and resulting store closures will have wiped millions of pounds off their top lines.
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