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Kcaj in talks with restructuring specialist

Icelandic investment fund Kcaj, which part owns Cruise and Mountain Warehouse, is in talks with restructuring specialist Deloitte to assess options for the company and its investments.

Kcaj’s main investor is Icelandic firm Milestone, which is understood to have been hit hard by the collapse of the Icelandic banking system.

Representatives of Milestone-owned Askar Capital, which effectively manages Kcaj and its investments, have been in talks with Deloitte to discuss options for the business, which could include administration.

Askar Capital managing director of corporate finance Bjarki Brynjarsson said: “We are looking at how the businesses are performing and to see how much support is needed. We are proactively working with the companies to come up with the best solution and make sure that the businesses are supported as needed. Most of the businesses are performing well.

He added: “We are not excluding any options to safeguard the value of the businesses.”

Brynjarsson denied that the talks were a direct result of funding problems caused by the Icelandic crisis but said:

“In this economic environment, people are sitting on their cash more, and it’s inevitable they are looking more closely at where they are putting their cash.”

Brynjarsson said that things were “moving quickly” and that decisions of the future of Kcaj were likely to be made within the week.

If Kcaj went into administration it would likely force the sale of some of its stakes in various retail chains. Sources told Drapers that Mountain Warehouse, Jones Bootmaker, Duchamp and Cruise, were among the Kcaj-backed businesses looking for new investors.

However there is no suggestion that any of Kcaj’s retail businesses are in danger of collapse as a result, and most are believed to have traded well over Christmas.

Kcaj holds minority stakes in Jones Bootmaker and Mountain Warehouse. Sources told Drapers that the management teams and or existing shareholders were ready to buy back Kcaj’s stakes in these businesses.

However one source close to the situation said there were still “a lot of grey areas”. He said: “It’s not at all clear what is going to happen. You have to appreciate the UK assets are a very small part of the overall fund and there is still a lot of speculation. I think it’s fair to say Milestone would consider bids for their bits of the [UK] businesses now though.”

Kcaj was set up by former Baugur director Jon Scheving Thorsteinsson. It also owned menswear tailoring business Hardy Amies and womenswear chain Ghost, which both went into administration in October. The future of Blooming Marvellous, a maternitywear chain owned by Kcaj, has also been questioned in the last week.

Deloitte made no comment.

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