May Trading UK, clothing supplier to high street multiples including Primark, Next and Arcadia’s Topman, has gone into administration after millions of dollars allegedly were stolen from its Bangladesh factory.
May Trading’s sister company MA Hong Kong has also gone into administration as a result of fraud. The 20-year-old businesses, co-owned by Jason Marchant and Robert Au and based in London’s King’s Cross and Hong Kong, went into administration on October 31.
Marchant and Au owned the factory in Dhaka, AMCS, which specialises in outerwear. Three months ago the pair was alerted to suspicious behaviour at the factory and sent in an audit team to investigate.
The team reportedly discovered that a shareholder and director of AMCS had defrauded the business of millions of dollars, although the exact sum is not yet known.
Marchant and Au were lining up a buyer for the factory, but the sale fell through last week. Their bank refused to fund the factory following the alleged embezzlement. Marchant told Drapers he had no choice but to work with administrators to conclude the sale.
“I had to make the decision to go into administration,” he explained. “It’s frustrating as the business has been profitable. We have put huge investment into the factory and it was fully compliant for all our major retailers.”
He said the business is in talks with a well-known third party company about buying May Trading UK and MA Hong Kong. Marchant said the majority of staff will go with the business in the deal, but it is understood some redundancies have been made.
A buyer for the factory is still being sought.
Marchant also owns a stake in British heritage brand Common People, which wholesales and has a shop in Edinburgh.