Austin Reed Group has received a loan from European retail investment fund Alteri Investors four months after it launched a company voluntary arrangement.
The three-year loan from Alteri Investors for an undisclosed amount will be used to buy new stock and invest in the group’s online operations.
Alteri was formed last October as a joint venture between US private equity group Apollo Global Management and Gavin George, former chief executive of restructuring specialist GA Europe, to invest in struggling retailers on the UK high street.
This is its second investment since the fund was formed, after the company acquired €95m (£68m) of debt in German firm Puccini Group, which owns the babywear and kidswear retailer Baby Walz, and homeware retailers Die Moderne Hausfrau and Mirabeau, from a consortium of lenders in March.
George said: “Austin Reed has a great heritage and we believe it has a long way to go in terms of online and international trading, as well as a resurgence in performance in its domestic market.
“The group [comprising men’s and women’s formal and casualwear retailer Austin Reed and mainstream womenswear retailers CC and Viyella] has operated below par for the last few years due to issues with the portfolio, so this will help fund necessary investments as well as giving it some room to breathe.”
In February, Austin Reed’s creditors approved plans for a CVA which included a 50% rent reduction for nine Austin Reed and 22 CC stores with a view to winding up trading after six months.
A further 35 underperforming stores were subject to a 20% rent reduction for 12 months, after which a consultation will take place to assess their viability. The remaining 166 stores were to remain open as usual.
The new funding is on top of the £3m pledged by shareholders in February to invest into 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: “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.”