Mosaic Fashions is preparing a pre-pack administration for its Oasis, Karen Millen, Warehouse and Coast chains.
Deloitte is understood to be handling the pre-pack administration, which is though to exclude Mosaic Fashions’ Principles and Shoe Studio Group businesses, both of which are up for sale. The pre-pack is expected to complete today.
Sources told Drapers that the pre-pack would enable Mosaic Fashions to complete a financial restructuring, effectively a debt for equity swap with its bank Kaupthing, as well as “cleaning up the best parts of its business”, including offloading poorly performing stores.
Mosaic Fashions has around £400 million of debt with Icelandic bank Kaupthing, which was put under the control of the Icelandic government in October. Mosaic Fashions has been in talks with Kaupthing about refinancing since then. In January Kaupthing agreed to put Mosaic’s debt repayments on hold until May. Baugur, the investment firm, also held a 49% stake in the group.
One source familiar with the situation said: “It will strengthen the viability of Mosaic going forward and will help get it into a better position in the current climate.”
Mosaic Fashions’ management team are expected to have a stake of between 5% and 10%
The sale of Shoe Studio Group is also thought to be imminent, with Dune tipped as the likely buyer. Dune chief executive John Egan is a former chief executive of Shoe Studio Group. He left the business last year.
On Friday Peter Davies, the former chief executive of Rubicon which used to own Principles, confirmed he had made a formal offer for the womenswear chain.