JD Sports Fashion has emerged as the frontrunner to buy beleaguered menswear brand Peter Werth, which helped rack up massive losses of £4.4m at its parent company Brand Acquisitions over the two years to January 31.
JD Sports Fashion is understood to have made more than one approach for Peter Werth, including expressing an interest in the business before it went into administration this week. An offer of just under £1m from investor Edward Woolf of EW Holdings was also tabled before Brand Acquisitions collapsed, Drapers has learnt.
Brand Acquisitions, the business behind Peter Werth and contemporary womenswear brand Pink Soda, hit the buffers last week when investor Electra Quoted Management pulled the plug on funding.
Brand Acquisitions notched up pre-tax losses of £4.4m over the two years to January 31, 2011, as well as receiving £5.5m in cash injections over the period.
In 2008, the Peter Werth brand was sold to entrepreneur Greg Tufnell for about £10m in a deal which saw the eponymous founder Peter Werth make a complete exit from the business. In 2009, it made a £1m profit and Tufnell added Pink Soda to the business, rescuing it from administration. However, Tufnell left the company in July last year.
Administrators blamed the collapse of Brand Acquisitions on its strategy of chasing sales over margin, which included deals to supply off-price chain TK Maxx. However, a relaunch of the brand at trade show Bread & Butter in January to focus on a more premium 28- to 32-year-old consumer secured the brand 40 new stockists for autumn 11, including multi-brand chain USC.
Retail group JD Sports Fashion has ridden to the rescue of several brands in recent years, snapping up the likes of Duffer of St George and Sonneti, which it has gone on to use as own labels in its stores. However, it has also acquired standalone wholesale businesses such as Focus Group and rugby brand Canterbury of New Zealand. It was unclear what its intention would be for Peter Werth.
Joint administrator Jason Baker, a partner at FRP Advisory, said he was confident of completing a sale within two to three weeks, which he said would enable autumn 11 deliveries to be completed. He declined to comment on interest from JD Sports Fashion but said a shortlist of suitors was set to be whittled down on Monday.
Peter Werth has 160 UK wholesale accounts and 34 House of Fraser concessions. Pink Soda has 40 UK stockists. Baker said the preference was to sell the entire business to one buyer but conceded a separate sale of Pink Soda might be considered.