Internaçionale suppliers are counting their potential losses as the value retailer edges closer to administration, putting them at the bottom of the pile of creditors.
Drapersonline.com revealed this week that Lyn Vardy, Toby Underwood and John Cartwright of PricewaterhouseCoopers had been named as intended joint administrators for the retailer, which until last week employed more than 1,500 people across around 100 stores. Drapers understands it will formally enter administration later this week.
FC Fund Managers – headed by restructuring specialist Jason Granite – and Barclays Bank were named in the document as “persons who are or may be entitled to appoint an administrative receiver of the company or an administrator”.
FC Fund Managers has reportedly acquired nearly £35m-worth of secured debt, putting the firm at the top of the list of creditors once Internaçionale enters administration. Administrators and banks are next in line to receive payment, followed by staff.
Some head office staff are thought to have been paid this week, but some store staff and area managers were waiting for payment as Drapers went to press. It is thought the intention is to allow Internaçionale to continue trading from administration, in which case current shop staff are likely to be paid. However, Drapers has seen photographic evidence that suggests some of those made redundant must go to www.gov.uk to claim what they are owed.
Suppliers and landlords are usually categorised as ordinary creditors, and so will only receive any reimbursement after this point, but three sources said they had already been told by Granite that there would be nothing left in the kitty for them. One supplier told Drapers Granite had said there was £12m of unsecured debt.
One supplier claimed: “[Internaçionale] is still selling my stock that I have not yet been paid for and [Granite] has told me I am not going to be paid.”
Both PwC and Granite declined to comment.
Separately, landlords seeking clarity over claiming rent from tenants in administration received a boost on Monday, after Land Securities, Hammerson, Intu and British Land won a two year case against gaming retailer Game.
As a result of the ruling, retailers must pay rent on a ‘pay as you trade’ basis, regardless of when the retailer _ led for administration. Previously rent would have been paid at the subsequent quarter it was due – so could accrue over three months – and was treated as an unsecured claim. Game is thought to be appealing.