Womenswear marketplace Little Black Dress has been bought out of administration by private investment firm Fashion Ventures Limited in a pre-pack deal, Drapers can reveal.
The sale of the Manchester-based business, which sells occasionwear brands including Adrianna Papell, Goddiva and Little Mistress went through last night.
Its six-person team has been retained as part of the deal, said Little Black Dress CEO Mark Evans.
Evans told Drapers: “We’re extremely pleased that the future of Little Black Dress has been secured: that jobs have been saved and that we hope to be able to continue support our UK and international brands in the future.
“The shareholders have invested significantly in the business since launch in 2014 and we are devastated that we’ve been unable to continue the business in its current form.
“Over the period the business has achieved sales of over £13m for its brand partners. It has built both close working relationships, plus strong personal relationships with many suppliers.”
He added: “LBD management had been working on an additional round of funding raising for the business. This all came to halt in early March, when the round was curtailed, due to the UK lockdown and the collapse of sales in the occasionwear market. Despite our best efforts over the last months we were unable to secure a solvent sale of the business.
”Administration therefore became the only option and a legal process was instigated. The business has been bought from the administrator by Fashion Ventures in a pre-pack arrangement. A full process was conducted to find the best home for the business and its employees. All jobs were saved and a process of re-engagement with brands will commence immediately.
”The new owners expect to have the site operational again by mid-summer to coincide with the reopening of the hospitality industry. Future details on the relaunch will follow.”
Evans blamed coronavirus for its downfall: “The annoying thing is we’d gone through a lot last year, such as re-platforming the website, and we’d taken a real hit on sales in late summer/early winter. However, we started this year in double-digit figures. Then we were side wiped by the coronavirus.”
He added: “We went through a process of trying to find a buyer to take on the business and raise money, but because it had debt to the shareholders, we could not find a buyer to take on the business as a going concern. We were left with no option than to go through the process we’ve gone through. The shareholders, I am one of them, have committed a lot of cash in the past few years.”
Evans said he is unsure what the future holds for the business, or whether he will remain as CEO: “The new owners are safeguarding jobs, but whether I’ll be running it in the future, I just don’t know. It’s all very uncertain.”
He also warned that suppliers might not be paid money owed to them: “As part of the administration, suppliers will become creditors. Whatever funds raised from the sale will be distributed, but it is unlikely they would get anything from the administrators.”
Several third-party suppliers have told Drapers they are “not surprised” as they have been owed money from the business for a while.
One supplier said: “I’m not surprised because we’ve been keeping an eye on the business over the few months as we’ve been owed money and in the past few months, the company has had two county court judgments.” The judgments equated to more than £9,000.
Another supplier said: “I’m not shocked, I’ve had my suspicions about the business as we’ve been struggling to get hold of the company for money owed to us. The contact has got less and less from the back end of December.”
Another told Drapers: “It must have been bad because I never thought the CEO would ever get rid of that business. They haven’t even sent out a letter to tell suppliers – you have to notify suppliers of something like this.”