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Diffusion out of administration and plotting revamp of shops

Branded independent chain Diffusion is gearing up to open two more G-Star franchise stores and revamp parts of the business, after its owners bought it out of administration last week.

It is understood Diffusion was forced into administration after its Morgan franchise business was badly hit by the collapse of the UK licence holder for the young fashion company in June last year. Diffusion concentrates its offer on street and casualwear brands including Diesel, Y3 and Fornarina.

Sources told Drapers that Diffusion does owe money to some suppliers, but co-owner Carl Peddie has met with brands to reassure them the business will keep going and that he will endeavour to pay some money back.

One supplier said: "He is known to be a really good operator and he has handled the situation well by going out to tell all the brands what is going on. People are confident that the business will get back on track fairly quickly."

None of Diffusion's four multi-brand shops, in Telford in Shropshire, Walsall, Wolverhampton and Merry Hill Shopping Centre in Dudley, will close. However, the buy-back administration deal has meant Peddie can now dispose of the two Morgan franchise stores.

Peddie runs a separate company, unaffected by the administration deal, to operate his G-Star franchise store in Birmingham. It is understood the retailer is set to open two more G-Star shops, in Gateshead's MetroCentre and the Eagle Centre in Derby, later this year. Some of Diffusion's shopfits will also be improved over the coming months.

Peddie was unavailable for comment.

INDIE CASUALTIES

MARCH - Sheffield's Brother 2 Brother goes into administration after 18 years of trading. Its G-Star franchises continue to operate.

JUNE - Limeys is bought out of receivership by Arev-backed fund Kcaj.

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