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Cath Kidston to pay wages owed to UK staff

Cath Kidston has agreed to pay three weeks of wages owed to staff who were made redundant when the business went into administration less than a week before pay day. 

Just over 900 people who were made redundant on Tuesday with immediate effect, were told they would not be paid their salaries due on Friday. 

However, Cath Kidston chief executive Melinda Paraie told staff yesterday they would be paid for the period between 1 April and 20 April. The letter to staff also said that hundreds of staff who had previously been notified of being furloughed would receive 80% of their usual salary up to a £2,500 cap. 

The letter, seen by Drapers, said: “Through ongoing talks with Barings Private Equity Asia, we have secured an agreement to pay all employees that were made redundant on the 21st April. I am now able to confirm that you will be paid any wages owed to you from 1st April to 20th April when the administration took effect. Those employees who were furloughed, will receive 80% of their usual salary up the £2,500 cap in line with government guidelines.

“I apologise for the delay in being able to share this information with you, and the anguish that this has caused. I can assure you that there has been a lot of work behind the scenes to ensure that these critical payments can be made to you. Unfortunately, as a result, we are unable to process this payment in time for the usual pay day of 24th April, however it is our intention to have this payment with you by the 30th April 2020.”

It added: “As Cath Kidston Limited is now in administration, all ongoing enquiries will still need to be managed by Evolve, however I felt it was important that you heard this from me.”

It comes after Cath Kidston appointed Alvarez & Marsal and law firm Shoosmiths as administrators to undertake an urgent review of the business, including a potential sale. 

Baring Private Equity Asia has since struck a deal with administrators and acquired the assets through an independent sale process as CK Acquisitions. The private equity firm has held a stake in Cath Kidston since 2014. 

The bid did not include Cath Kidston’s 60 UK stores, which will not reopen following the coronavirus lockdown. Around 918 staff have been made redundant, with 70 jobs being saved. 

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