Unsecured creditors owed money by footwear retailer Shoon could lose a combined £1.6m following its pre-pack administration last month.
Trade and expense creditors facing a £1.1m shortfall, according to an administrators’ report filed on Companies House. Unsecured employee claims amounted to £56,362.
The report said that, while the administrators would “ordinarily” seek a decision from creditors to approve proposals for repaying some or all of what is owed, there is “no requirement” to do so in Shoon’s case, since there is “little likelihood of a dividend being available for unsecured creditors”.
Creditors with debt amounting to at least 10% of the company’s total debt were invited to contact the administrators.
The company said: “At present, it is considered unlikely that there will be sufficient funds available to enable any form of distribution to unsecured creditors.
“Creditors should however continue to submit details of their claims […, which] will be collated at passed to any subsequently appointed liquidator, should the position change.”
As exclusively revealed by Drapers, the retailer filed notice of its intention to appoint administrators last month.
It subsequently collapsed on 24 November, appointing Neil Bennett and Alex Cadwallader from Leonard Curtis as joint administrators.
Four of its stores and concessions were sold to The Shoot Shoe Company in a pre-pack sale, while the remaining six stores and concessions closed, resulting in 45 job losses.
The administrators’ report said that, during the past two years, the business suffered from a “dramatic fall in sales and uncertainty created [by] the Brexit vote”, resulting in “excessive” head office and infrastructure costs.
It also cited high street discounting as a key factor in Shoon’s decline, while “a number” of retail units became loss-making.
Shoon completed a second company voluntary arrangement since 2015 earlier this year, agreed with creditors in April, in an attempt to reduce overheads.
Despite this, the business continued to accumulate debts, and was unable to gain additional working capital funding from its secured creditor.
The report summarised trading in recent years. Turnover at 30 September stood at £2.34m, down on £6.77m at 31 January 2016. It made an operating loss of £878,100, compared with operating profit of £575,000 at the end of January last year.
In June 2016, the retailer bought foot clinic and comfort footwear retailer Shuropody for an undisclosed sum. Shuropody is not thought to be affected by the administration.