Mosaic Fashions’ Oasis, Karen Millen, Warehouse and Coast brands have re-emerged from administration as a newly formed company called Aurora Fashions, in a deal led by Kaupthing and Mosaic Fashions’ management team.
Mosaic Fashions appointed Deloitte as administrator of the four womenswear chains today before Kaupthing and the Mosaic management team immediately bought them back.
The deal enabled Mosaic Fashions to complete a financial restructuring of the businesses, effectively a debt for equity swap, ending the difficulties it has had over repayment of its £400 million debt which was held by Kaupthing, the Icelandic bank which was put under the control of the Icelandic government in October.
The administration also enabled Mosaic Fashions to streamline its operations to help it better cope with the economic downturn.
“Our recent past has been difficult and is now behind us. From today we look forward to a new and exciting future as Aurora Fashions.”
Derek Lovelock, chief executive, Aurora Fashions
Aurora said in a statement “Management and Kaupthing Bank have agreed terms that secure the future of these four well-known fashion brands, restoring the group’s balance sheet to a healthy position and providing additional working capital. The new funding package will also enable the brands to develop and realise their potential. The four brands, Karen Millen, Coast, Warehouse and Oasis, will continue to share a common infrastructure and other essential functions that bring cost and operational synergies to the group as a whole.”
Shoe Studio Group and Principles are in administration. However the statement said that the sale of Shoe Studio was at an advanced stage and that there were negotiations over a sale of Principles. Deloitte is running both businesses and an annoucement is expected about a sale of both within days.
Aurora Fashions chief executive Derek Lovelock said: “We are delighted that the future of some of the UK’s best loved fashion businesses has been safeguarded and that we can now build upon the excellent reputation our brands already have with our customers”.
“We look forward to our continuing relationship with Kaupthing and also to the end of what has been a difficult chapter in our history. Most of all I would like to thank all our employees and our many suppliers and partners for their understanding and unswerving support, especially over recent months whilst the situation was being resolved. I am acutely aware this was only made possible because of the long-term nature of the relationships we have with them. They have been incredibly supportive, for which we are immensely grateful and we look forward to continuing our relationships with them.”
“Our recent past has been difficult and is now behind us. From today we look forward to a new and exciting future as Aurora Fashions”.
Aurora’s four fashion brands operate 1,377 stores across 45 countries. The group employs 8,700 people worldwide, including 7,861 people in the UK.
Helplines have been set up for creditors, landlords and suppliers:
01865 734696 – AURORA FASHIONS
01865 734697 - PRINCIPLES
01865 734698 – THE SHOE STUDIO GROUP