Hinchliffe in talks to buy back Facia
Monday 03 June 1996
Though Mr Hinchliffe was unavailable for comment, he was understood to be in Sheffield holding meetings with potential financial backers in an attempt to regain control. "He is not just taking it lying down," one source said.
Receivers to Facia, KPMG, said that they had only spoken briefly to Mr Hinchliffe on Saturday and had not heard from him since. "He has made no move," said Tony Thompson of joint receivers KPMG. It is understood that Mr Hinchliffe's co-operation is not being sought as he was not involved in the day-to-day running of the business.
Mr Thompson said he had received expressions of interest from eight different parties, including existing UK retailers, of which four were for more than one part of the group. There have been expressions of interest from the management of two of the trading businesses. There is one interested buyer for the whole group though this has come from outside the company.
However, it is possible that Gary O'Brien, Facia's chief operating officer, may be interested in tabling a bid for the whole of Facia.
Though he declined to confirm this yesterday, he said that he felt the strategy of bringing together a number of high street brands and reducing the central overheads was a sound one. "There weren't significant problems. The group was just under-capitalised. These are still good little businesses. The baby was suffocated before it had a chance to grow."
KPMG said all the Facia stores were trading normally and that there were no plans to close any of the 500 shops included in the receivership. A spokesman said the news had been well received by staff as it had "removed some uncertainty". Facia employs 8,500 staff in total, including 1,000 in the shoe shops.
The receivership includes the Facia parent company as well as five of the trading subsidiaries, Salisbury's Contessa, Oakland, Torq and Red or Dead.
Sears will go to the high court at noon today where its petition to place Facia's UK footwear businesses into administration will be heard. This concerns the shoe chains Saxone, Curtess, Manfield, Trueform and Freeman Hardy Willis.
The receivership does not include the Sock Shop chain, which has separate banking agreements with Bank of Scotland. KPMG will meet the bank today.
Also not included are the Bata chain of shoe shops in Germany, which are owned by Mr Hinchliffe personally, the Colibri lighter business and French and Scott, a cosmetics company.
According to the receivers, Facia collapsed with debts of pounds 30m. Management accounts show a loss of pounds 9m in the past 16 weeks.
Sears' decision to serve a petition for administration on Facia's footwear business and take a pounds 25m exceptional charge to cover property sales and Facia's debts will place further pressure on chief executive Liam Strong.
It has emerged that under the terms of Sears deal with Mr Hinchliffe, Sears still owned all the stock in the shoe stores such as Freeman Hardy Willis, Saxone and Curtess. Sears also paid the staff wages and then was reimbursed by Facia. The store leases had not been transferred to Facia and now revert to Sears. Sears slumped to a pounds 120m loss last year, due in part to the pounds 54m loss on the shoe deals with Mr Hinchliffe.
A Sears spokesman justified the deal saying it was the only one on offer. "It was that or close them down," he said.
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