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Tie Rack investment triggers store closure worries

The future of Tie Rack could be under threat following investment from an unnamed backer, industry sources have warned.

The size of investment and future plans have not been disclosed.

The investors are understood to be primarily interested in the group’s Rolling Luggage fascia. Industry sources indicated Tie Rack could be downsized or wound down completely as a result.

Of the 47 UK Tie Rack stores, 11 are already due to close, as are 13 of its 85 international stores, a decision that was taken prior to the investment.

One source said “there could be quite a few redundancies”, resulting in the loss of up to 30 buying and merchandising jobs at Tie Rack’s headquarters in Brentford, Middlesex, with further positions in jeopardy if more stores are closed.

Another added: “The new investors aren’t interested in Tie Rack, just the other format.”

However, a source close to the situation said it was not a “pull the plug” scenario and the cash injection, which was made three weeks ago, could be used to bolster the business’s position in the market.

A spokesman for Tie Rack said: “We can confirm the group has secured new funding. It is still early days and we are looking to secure a sustainable future for the business. While that work is ongoing it would be inappropriate to comment further.”

For the year to January 31, 2012, Tie Rack’s turnover was £1.29m with a £907,000 profit following a £1.5m property sale. In 2011 the group made an £84,000 loss.

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