Jaeger suppliers mull lawsuit as anger over UK administration rules mounts
As more UK retailers go under, some of them to emerge quickly from administration, some suppliers are angry about regulations that leave them heavily out of pocket while failed businesses start again.
The Guardian reported that some Jaeger suppliers, including Portuguese clothing giant Calvelex are mulling court action over the action of former directors.
And it has also emerged that after clothing chain Joy filed for administration last week but was quickly bought by a new entity formed by its previous owners, suppliers will recover very little of what they are owed.
Jaeger filed for administration last month and a number of suppliers were looking at a rescue bid for the venerable classic fashion firm. However, it emerged that the rights to the name had been sold to a mystery buyer, the newspaper said. Its secured debt was also sold to a still-unnamed buyer putting that buyer ahead of other suppliers in the queue to recover money owed.
“We were very disappointed with this situation and question the thinking behind selling the intellectual property of the Jaeger brand name before the company went into administration since without it the value to potential bidders would be greatly reduced,” Calvelex head César Araújo told the newspaper.
Jaeger had been owned for several years by Better Capital, headed by Jon Moulton, but had struggled for some time.The company put it up for sale earlier this year but in April it became the latest in a string of well-known UK retail businesses to throw in the towel. Moulton said “extensive efforts were made to find a buyer and buyers certainly had a chance to bid in any format.”
But Araújo said the group of suppliers interested in acquiring the brand was looking at its options, including possibly “court action to examine the actions of the company directors and the former owners of Jaeger.”
He has also called for a change in the law saying it was getting harder for international suppliers to do business in Britain and that the law should “provide a more ethical, moral and level playing field that gives all creditors access to information and the opportunity to have input into the future of companies in administration.”
Since its filing, Jaeger’s administrators have closed almost half of its stores and made 200 or its 700 staff redundant.
Agent Provocateur, Brantano and Jones Bootmaker have also gone into administration this year with Jacques Vert owner Style Group and value chain Store Twenty One also at risk. Joy went into administration on Monday last week but, like some other chains this year, was rapidly bought out in a so-called pre-pack administration deal.
While administrators say such deals allow them to move quickly and preserve as many jobs as possible, creditors of the companies concerned, including landlords and suppliers, are often less happy. Such deals mean businesses can start again without having to continue property leases or to pay previous suppliers.
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