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Brands left in the dark as administrators prepare to close USC stores

Young fashion brands have been left in the dark following the news that Sports Direct is preparing to close a third of USC stores, putting hundreds of jobs at risk.

Brands told Drapers they have not been contacted by the Mike Ashley-owned high street chain about the closures, which could see 30 USC stores shut as early as this weekend.

Sports Direct’s directors filed a notice of intention to appoint receivers to USC at the High Court on January 6. A formal notice of intention usually gives a company 10 days before it has to declare insolvency. Duff & Phelps, an insolvency specialist, and Gallaghers, a law firm, have been lined up to jointly handle any wind-down.

One sales manager of a menswear brand said: “We haven’t heard anything from them yet. At the moment it’s business as usual, but we have arranged a meeting for next week to find out more about what’s happening.”

The decision to file with the High Court’s Chancery Division was reportedly prompted by a demand from Diesel for unpaid debts. The claim was made on December 15, and on December 23, at a meeting of USC’s directors chaired by chief executive Dave Forsey, it was agreed that the company would be unable to repay the debts.

The managing director of another menswear brand stocked in USC said: “We’re trying to arrange a meet, but we haven’t heard anything. We are only in selected stores and we, like everyone else, are a little in the dark. They wouldn’t have done it, but Diesel sent in the winding-up order so they had no choice. Last I heard they had excess stocks of £1.2m in Diesel and G-Star is in for £1.4m.”

One wholesale manager of a menswear brand said: “I’m sure it’s just a regrouping exercise to allow them to pay Diesel off, but we haven’t been told anything.”

In October 2014, Drapers reported that Diesel was pulling out of USC after 15 years.

It is understood cuts have already been made by the young fashion retailer. Dozens of staff at USC’s warehouse in Dundonald, Ayrshire, which employs about 100 workers in total, were reportedly made redundant on January 7.

Drapers has also learned that two senior menswear and womenswear buyers have left USC in the last two weeks. Kate Coughlan, women’s senior branded buyer, has left the retailer to join as a womenswear denim and casual buyer. USC’s men’s senior branded buyer Sam Tallents has also left the business.

Sports Direct is believed to have 90 USC stores, with over 1,000 employees.

Diesel declined to comment and G-Star did not respond to requests for a comment.

Readers' comments (2)

  • Diesel and G-Star have been extremely foolish if indeed they are in for the amounts stated in this article. This scenario was always going to happen.

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  • darren hoggett

    USC have 'knocked' Diesel and G-Star, simple as that. The question is, how many other brands are in the hole?

    Unsuitable or offensive? Report this comment

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