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AllSaints to pay bills after £105m lifeline

AllSaints suppliers can look forward to receiving overdue payments within days after the young fashion retailer concluded the saga that surrounded a deal to secure its future with a £105m investment from Lion Capital and Goode Partners.

AllSaints chief executive Stephen Craig said the cash would be used to pay off £22m of mezzanine debt owned by defunct Icelandic banks Kaupthing and Glitnir.
He said: “All suppliers’ stock and non-stock will be paid anything overdue [according to] their terms.” The rest would be ploughed back into the business, he added. Lloyds has also increased AllSaints’ facility to £31.5m.

Craig, who described the past few months as being “more stressful than post the Icelandic banking collapse [in 2009]”, said his focus had been on avoiding administration to protect the business’s 3,000 employees and suppliers. It is unclear how much AllSaints owed suppliers in total.

“We have a unique supply base - much of our product is handmade, which is our point of difference,” he said. “These people put their heart and soul into our product and it was important that we protected them.”

AllSaints was initially put up for sale by its Icelandic shareholders in February. However, while the business attracted significant interest from high-profile entrepreneurs and private equity firms including M1 Group, a fund part-owned by likely incoming Lebanese prime minister Najib Mikati, MSD Capital, founded by computer maker Michael Dell, and Jon Moulton of Better Capital, all potential deals collapsed at the final hurdle.

Trade players including Arcadia owner Sir Philip Green, Urban Outfitters and SuperGroup are also believed to have sniffed around.

Chairman Kevin Stanford is understood to have emerged from the deal with 15% and an option to buy a further 5%. He will continue as chairman. Goode Partners, a US investment firm, has taken 10% with an option to add 10%, while Craig and the management team have 9%.

Lion Capital, which also owns American Apparel, holds the remaining shares. Craig said AllSaints’ global expansion strategy would be “opportunity dependent”. Stores in Washington and Chicago are on track to open as planned in June, and other overseas openings will resume in the second half. He added that he had “live deals” in discussion in the Middle East, Australia, Japan, India, Russia, Canada and Greece.

Craig said trade had been hampered in February because the retailer had struggled to bring in new stock, but had improved in April after deliveries. He said: “We are £1m in front of budgeted EBITDA. We are in front on like-for-like sales and the web is on fire. Lion and Goode believe in our strategy to have an ecommerce brand with world-class stores. They have provided a war chest to forge ahead in pursuit of this opportunity.”

The retailer’s mid-season Sale would end on Sunday, he added.

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