The designer sector was rocked this week by the shock departure of John Heath from designer mini chain Cruise in the same week that Flannels issued suppliers with a proposal for a Company Voluntary Arrangement (CVA) to ensure the chain’s survival.
The Cruise managing director is understood to have left on Monday, along with finance director Ian Baird, just six months after the pair completed a pre-pack administration of the business. The circumstances of their departure are unclear.
James Pow, who was appointed non-executive director by the Bank of Scotland in 2006, has taken over the running of the company. Pow is a turnaround specialist and was previously chief executive of Aquascutum, Mackays Stores (now M&Co) and Hackett.
Heath and Baird led a management buy-in of Cruise in 2006 for a rumoured £7m. The deal was backed by Kcaj, the Icelandic investment firm that hit difficulty after last year’s collapse of the banking sector.
Separately, designer brands were largely supportive of the CVA proposed by Manchester-based Flannels on Monday. Under the CVA proposals, which are being overseen by financial consultancy Deloitte, owner and managing director Neil Prosser is expected to close three of the chain’s stores. It was unclear what payment proposals Flannels would offer suppliers as Drapers went to press.
Suppliers contacted by Drapers said they were owed considerable sums of money but added that they were likely to support Prosser’s restructuring plan.
Prosser founded Flannels in 1976 in Manchester. It became one of the leading designer indies in the country focused on selling exclusive product. It trades from 11 sites including Leeds, Nottingham and Birmingham.
Cruise was founded in 1981 by Jim Gibson with a similar ethos. It has more than 10 stores in locations including Glasgow and Edinburgh.