Suppliers of Blue Inc’s trading subsidiary A Levy & Son are owed a total of £31.6m following its pre-pack administration last month, its administrators report has shown.
A Levy was put into administration on January 19, resulting in 76 store closures and the loss of an estimated 580 jobs. Blue Inc bought the company back that same day, saving 1,500 jobs across 160 stores.
A Levy owes its non-preferential creditors, including clothing manufacturers and wholesalers, landlords and logistics firms, a total of £31.6m, according to a report by administrators at Leonard Curtis. Revenue and Customs is owed £3.1m.
The administrators estimate there will be £3m available for preferential creditors, which primarily consist of employees.
The only secured creditor listed is Blue Inc, which is owed £4.1m.
Four of the clothing suppliers listed are owed more than £1m each, including London-based Padma Textiles, which is owed £1.7m, and Manchester wholesaler Whispering Smith, which is owed £4.6m.
A source close to the situation has indicated that A Levy’s suppliers are likely to receive between 50p and 80p in the pound, although negotiations are ongoing. This is a higher dividend than is typically paid to unsecured creditors following an administration.
But one supplier told Drapers he was focused on retrieving his stock, which is protected under a retention of title clause, as he holds little hope of recovering his debt.
In the 10 months to October 31, A Levy incurred a loss of £8.8m on a turnover of £81.9m. It had a book value of £38m on October 31 2015, including stock worth £16m.
Blue Inc paid £1.2m for A Levy on January 19, including £800,000 for its stock.
Blue Inc declined to comment.