Two of Blue Inc’s biggest suppliers have taken a majority share of the firm, Drapers understands.
Padma Textiles and MAF Clothing have converted £4m of their £6m loans to Blue Inc into equity, giving them between a stake of between 50% and 60%, a source close to the situation confirmed.
However, the source warned that some UK suppliers would be reluctant to start working with Blue Inc again unless credit insurance is reinstated.
Another source said executives from the suppliers would likely become joint chief executives following the deal.
“It’s much better for the business,” he told Drapers. “Given what happened in the past a lot of UK suppliers have been reluctant to deal with Blue Inc because the trust was gone, but these guys are steadying the ship.”
He continued: “Their strategy moving forward seems positive. They are being very open and transparent, which wasn’t always the case [with Blue Inc].
“There is still an opportunity for Blue Inc on the high street, it has some good locations and because of its smaller size it is more agile than other businesses.”
In October Blue Inc chief executive Steven Cohen stepped down from his role after 11 years. The young fashion brand promoted retail operations director Peter Girt, who has been with the firm for 10 years, to managing director.
Blue Inc’s trading subsidiary, A Levy, was put into administration on 19 January, resulting in 76 store closures and the loss of an estimated 580 jobs. Blue Inc bought the company back that same day, saving 1,500 jobs across 160 stores.
Drapers has contacted Blue Inc for comment.