USC set to enter administration
Monday 29 December 2008
USC, the designer clothing chain backed by business tycoon Sir Tom Hunter, has become the latest retailer to collapse into administration, The Independent can exclusively reveal.
It is understood that the 58-store chain was set to appoint PKF as administrators this afternoon after succumbing to dire trading in the young fashion sector.
However, Sir Tom’s investment vehicle, West Coast Capital, is poised to buy the USC out of administration in a so-called pre-pack deal. The pre-pack administration will see USC continue trading from 43 stores, but 15 of its loss-making stores will close.
The pre-pack deal will preserve the jobs of 1,100 of USC’s 1,427 employees. However, about 300 staff – of whom the majority are part-time – are likely to lose their jobs.
The chain is the fourth retailer to collapse into administration in the past week, following the appointment of administrators by Whittard of Chelsea, the coffee and tea specialist, The Officers Club, the value menswear chain, and Zavvi, the entertainment retailer. Adams, the 260-store childrenswear chain, is also poised to appoint PricewaterhouseCoopers as administrators this week. Whittard of Chelsea and The Officers Club were bought out of pre-pack administration last week.
USC is not the only retail chain backed by Sir Tom to be struggling. He is set to lose a significant part of his stake in garden centre group Wyevale in a debt-for equity-swap with his bank HBOS, which is imminent. However, the performance of the shoe chain Office, which is also backed by Sir Tom, is understood to be more robust.
USC posted a loss of £8.8 million in the year to 27 January 2006.
However, USC is understood to have suffered poor trading this year, along with many other fashion retailers, and widening losses. USC stocks brands including Diesel, Firetrap, Henri Lloyd and Replay. West Coast Capital declined to comment.
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