Facia falls into receivership

Retail chain collapses under pressure from creditor and auditors

Facia, the retail empire run by Stephen Hinchliffe, collapsed yesterday when accountants KPMG were appointed receivers.

The move followed emergency meetings between the auditors and the company's board last week and the lodging of a High Court petition by retail giant Sears to put Facia's shoe chains into administration.

Sources close to the company say the latest in a series of special board meetings with auditors Deloitte & Touche broke up on Friday with no resolution of concerns regarding its accounts.

These were understood to relate to questions about the way the Sock Shop to Saxone shoes group was being run and its sources of funding, following a detailed audit by the accountants.

Sources said its relationship with principal bank backer, Israel's United Mizrahi Bank (UMB) was a key area of concern. After an internal investigation, UMB's London branch recently sacked a manager, John Doherty, after concerns over improperly secured lending.

The probe centred on other loans, but industry sources confirm Mr Doherty was one of Facia's account managers. UMB declined to elaborate last week. "We don't make any comment on customer relationships because of confidentiality. We don't comment on any of our current or former staff either," said Christine Stradling, head of personnel.

Mr Hinchliffe and fellow director Christopher Harrison are already facing disqualification by the Department of Trade and Industry after the collapse of another company, Boxgrey, in 1993. Facia was also facing fines unless it filed its accounts to January 1995 by 1 July.

Mr Hinchliffe built Facia up into the country's second largest private retailer after Littlewoods in a flurry of deals starting in 1994, with acquisition of the loss-making Salisbury's luggage chain, backed by Scottish fund manager Murray Johnstone.

Sock Shop, fashion chain Red or Dead, lingerie specialist Contessa and menswear group Oakland followed. The acquisition of Sears' struggling shoe shops, including Saxone and Freeman Hardy & Willis, increased the number of shops to 850.

On Friday, Sears lodged a petition in the High Court to put the shoe shops into administration after Facia failed to pay its rent. Sears says it is owed pounds 4m, plus stock, and will take a pounds 25m provision for disposal of the 380 shops. Under its deal with Mr Hinchliffe, it also paid some 1,400 staff but was reimbursed by Facia. However, sources say a cheque for staff wages also bounced earlier last week.

Facia was seeking pounds 20m-pounds 40m in further funding and last week confirmed it was in talks with the Nasdaq-quoted shell company Texas American Group over a possible takeover. The announcement hardly inspired creditors' confidence, according to industry sources.

TAG, which claims golf clubs and hotels in Europe among its assets, is run by Bill Grosvenor, a London-based former adviser to Polly Peck's Asil Nadir and an undischarged bankrupt and convicted fraudster.

TAG also said it was seeking revenue itself but would attempt to sell shares in the US to refinance Facia.

At the end of last week, a Facia spokesman was still maintaining that the firm was solvent saying that the company's debt at the end of April stood at under pounds 10m, against annualised sales of pounds 250m.

He also confirmed the funding came principally from UMB and other firms owned by Mr Hinchliffe outside Facia, including the lighter and pens supplier Calibri and the toilet-ries firm French & Scott, which Mr Hinchliffe bought in 1994.

The slice of Prince Charles and Princess Diana's wedding cake and the original box from 29 July 1981
newsPiece of Charles and Diana's wedding cake sold at auction in US
James Argent from Towie is missing, police say
newsTV star had been reported missing
Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind the scenes to watch the latest series
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
Winchester College Football (universally known as Winkies) is designed to make athletic skill all but irrelevant
Life...arcane public school games explained
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
i100(and it's got nothing to do with the Great British Bake Off)
Angelina Jolie with her father Jon Voight
peopleAsked whether he was upset not to be invited, he responded by saying he was busy with the Emmy Awards
Bill Kerr has died aged 92
peopleBill Kerr appeared in Hancock’s Half Hour and later worked alongside Spike Milligan and Peter Sellers
news It's not just the world that's a mess at the moment...
footballPremiership preview: All the talking points ahead of this weekend's matches
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
ebooksAn evocation of the conflict through the eyes of those who lived through it
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
Mario Balotelli pictured in his Liverpool shirt for the first time
Life and Style
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Data Scientist (SQL,Data mining, data modelling, PHD, AI)

£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...

SAS Business Analyst - Credit Risk - Retail Banking

£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...

Project Manager - Pensions

£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

KYC Analyst, Birmingham - £200-£250 p/d

£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone