Derek Lovelock, chief executive of the newly formed Aurora Fashions business, which rescued Oasis, Karen Millen, Coast and Warehouse from administration this week, has kicked off a tour of suppliers to reassure them of the company’s strong financial position.
The womenswear chains were part of Mosaic Fashions, the group which went into administration on Monday after months of negotiations over its £400 million debts.
They were rescued by the Mosaic Fashions management team led by Lovelock, and Kaupthing, the Icelandic bank which held the group’s debt and which had a 20% stake in the company. The rescue package enabled the bank to complete a debt for equity swap. The management has taken between 5% and 10% of the new company.
Lovelock told Drapers this week that he and his team would meet with all of Oasis, Warehouse, Coast and Karen Millen’s key suppliers to reassure them of the strength of the new Aurora Fashions business.
He added: “We will be cementing our future relationship with them.”
Lovelock said he anticipated it would take time to get credit insurance reinstated, but that the group had funds to overcome the situation. “We will get all our systems back up and running and will be paying suppliers on our regular terms,” he said.
Meanwhile, Principles, which was part of Mosaic Fashions, remained in administration as Drapers went to press.
Peter Davies, who ran the womenswear chain when it was part of Rubicon where he was chief executive, made an offer, but it was unclear whether he would be able to move quickly enough to complete a deal.
…as Dune rescues Shoe Studio
Footwear specialist Dune completed a rescue deal on Wednesday for Shoe Studio Group, which collapsed as part of the administration of Mosaic Fashions.
Dune, which has 42 stores and several concessions in the UK, took over the footwear group’s six brands, including Pied à Terre, Bertie and Nine West, and more than 300 concessions in House of Fraser, debenhams“>Debenhams and John Lewis. It did not buy its 11 standalone stores.
Dune chairman Daniel Rubin and chief executive John Egan, who was chief operating officer at Shoe Studio Group until a year ago, will manage the enlarged business.
Rubin said: “Combining our design and sourcing strength with the strong brands within the Shoe Studio Group stable will create a potent force.”
Lovelock said: “It is with some sadness that we say goodbye to the shoe business. The past three weeks have seen positive like-for-like sales and margins a full 10 percentage points ahead of last year. Indeed, many people have commented on how strong the ranges are looking.”
Lovelock added: “It is unfortunate that due to the overall financial difficulties of Mosaic Fashions we were not able to see the shoe strategy fully implemented. I am sure Daniel Rubin and his team will do a great job.”