Faith Shoes to be bought by entrepreneur Kinnaird

The Scottish entrepreneur John Kinnaird has stepped in to save Faith Shoes, the high-street chain put up for sale earlier this year after running into financial difficulties, in a move expected to save 2,000 jobs.

Mr Kinnaird is to buy Faith, which has 85 stores across the UK, in partnership with Agilo, an investment fund that targets distressed companies. One source said yesterday that while details were still being hammered out before the takeover could be announced, it was "a done deal". He said: "The business has changed hands. The good news is that most of the 2,000 jobs will be saved; the employees will transfer to the new owners."

Mr Kinnaird won the competitive auction "on price and best fit," the source added. He intends to merge the business with his clothing firm Envy, and Agilo's Chilli Pepper, a fashion brand aimed at teenage girls.

Mr Kinnaird previously owned Dolcis Shoes, which went into administration last year after its private equity backer, Epic, walked away during what was seen as a difficult time for shoe retailers.

Mr Kinnaird began his retail career as a director at Sports Division, a sportswear store owned by Sir Tom Hunter, another prominent Scottish businessman, joining in 1990 and profiting from his stake in the group when it was sold to JJB Sports eight years later.

Faith was, until this week, owned by Bridgepoint Capital, a private equity group. It bought Faith in 2004 for £64m from the son of the company's founder, Samuel Faith, who launched the company in 1964.

Bridgepoint has injected £15m of working capital into the company. When it became clear the group had once more run into funding problems, Bridgepoint went to Barclays, the bank holding Faith's debt, and proposed a further £8m injection as part of a wider restructuring. The talks broke down as Barclays refused to participate in a debt-for-equity swap proposed by the buyout group. As its options ran out, the bank took control of Faith, put it into administration, and started an auction, which will see Bridgepoint make a loss on its investment.