LK Bennett’s creditors, including suppliers, are thought to be owed more than £31.9m, a report from administrator EY has shown.
UK and Ireland creditors are owed more than £31.4m, mainland Europe creditors are owed €297,191 (£272,252) and US dollar creditors are owed $499,973 (£458,018).
It is estimated that only £600,000 will be available to be distributed among all the unsecured creditors under insolvency legislation.
The administrator’s proposal estimates preferential creditors are owed £26,000, in respect of claims for employees’ salaries, holiday pay and pension contributions. Wells Fargo, LK Bennett’s principal secured lender, was owed around £9.2m on 7 March, but has since received £5.4m.
Among the creditors owed the most are:
- Cavendish Holdco Limited (of which LK Bennett founder Linda Bennett is a director): £17.1m
- HM Revenue and Customs: £1.9m
- Aptos Solutions UK: £392,000
- Advanced Supply Chain Ltd (Corby): £313,171
- CCS Mclays: £115,523
LK Bennett appointed Dan Hurd, Hunter Kelly and Craig Lewis of accountancy firm EY as joint administrators of its UK business on 7 March. On 12 April Rebecca Feng, who ran LK Bennett’s Chinese franchises, bought the UK, Ireland and wholesale business of the premium womenswear retailer for £9.8m under the company Byland UK.
The retailer has debts owed to it by wholesale customers and concession partners totalling £1.7m. The document indicated, however, that some of these are “bad debts” and so the overall figure is likely to be lower.
Meanwhile, retention of title claims totalling £743,215 have been submitted by suppliers for goods that have not yet been paid for by the company. According to the document under the terms of the sale Byland, Feng’s company, is entitled to possession of all UK and Ireland stock, including stock subject to ROT. The document states Byland is currently “dealing with the claims made”.
Darren Topp, CEO of LK Bennett, told Drapers: “We are three months in, and the focus has been on getting the business back up and running. We have been negotiating with all the suppliers and stakeholders to get the business operating as near as normal as we possibly can. We are pleased we have made significant progress on that.
“We are starting the store upgrading programme in August and other developments in terms of products, marketing, visual merchandising. There has been a general investment in the business in terms of the look and feel of the products, the stores and service.”
When the company fell into administration, it was announced that there would be 55 redundancies across the head office and five store closures in Meadowhall in Sheffield, Bristol, Liverpool and Brent Cross and Westbourne Grove in London. At the time, LK Bennett employed around 480 staff in the UK across 39 stores, 37 concessions and its London head office.
The notice of administrator’s proposals shows that Byland’s offer did not include 15 of the company’s remaining retail stores. Consequently those unnamed stores were closed on 12 April, resulting in an additional 100 redundancies being made between 12 April and 17 April. In total, the sale safeguarded 388 jobs across the business.
EBITDA for the five months to December 2018 was a loss of £2.5m, the document shows. For the year to 31 July 2017, LK Bennett had an operating loss of £5.9m.