Austin Reed Group is on the cusp of a sale to a mystery buyer, sources have told Drapers, more than a year after creditors approved its company voluntary arrangement (CVA) proposals.
“There will either be a sale [of the business] or a transaction around the Regent Street store within weeks,” said one of the sources, who is close to the situation.
“Trading is OK and it is not a crisis move. It is an interesting approach. The buyer could take the entire business, including the Regent Street flagship, or they have identified another flagship site in a similar area.”
Austin Reed Group appointed property agency James Andrew International in August last year to dispose of the 35,000 sq ft Austin Reed flagship on Regent Street, but so far a deal has not been completed.
In addition to classic menswear and womenswear chain Austin Reed, the group includes mainstream womenswear retailers Viyella and CC.
The business is owned by Darius Capital, which is controlled by property tycoon Guy Naggar. Naggar bought Darius Capital through an investment company called Dawnay Day for £49m in 2006.
Naggar ran Dawnay Day with Peter Klimt, who sold all his interests in Austin Reed Group to Naggar in 2014.
In May last year, Austin Reed Group received a three-year loan from European retail investment fund Alteri Investors of an undisclosed amount, to buy new stock and invest in the group’s online operations.
The new funding was on top of the £3m pledged by shareholders in February 2015 to invest in the business to support a broader operational restructuring.
Austin Reed Group appointed professional services firm Deloitte at the end of 2014 to work on a strategic review of the business – including its lease terms – after it made a £1.29m loss in the year to January 31 2014.
Chief executive Nick Hollingworth said at the time: “With an improved funding structure in place and following our restructuring earlier this year, the business now has a solid platform to deliver the next phase of development as we seek to further enhance our multichannel offer.”
Around 99% of creditors approved the CVA in February last year, which allowed the business to exit 33 underperforming stores, documents filed by Deloitte show.
Austin Reed declined to comment.