Agent Provocateur sale to Sports Direct is a ‘preposterous disgrace to British business', says lingerie brand’s founder

Business became unviable after identifying ‘material misstatements’ in its accounts over a number of years that the company’s board, auditors and owners had failed to notice

Ben Chapman
Friday 03 March 2017 15:01 GMT
Joe Corré branded the deal ‘a phenomenal stitch-up’
Joe Corré branded the deal ‘a phenomenal stitch-up’ (Reuters)

The sale of Agent Provocateur by private equity firm 3i to a company part-owned by Sports Direct owner Mike Ashley is “preposterous” and “a disgrace”, the lingerie brand’s founder has reportedly said.

Joe Corré, son of Vivienne Westwood and former Sex Pistols manager Malcolm McLaren, who founded the chain in 1994 told The Guardian: “The pre-pack arrangement between 3i and Mike Ashley’s Sports Direct is a disgrace to British business up there with Sir Philip Green’s shocking behaviour over BHS.

“If this preposterous deal goes ahead with Mike Ashley, 3i and their partners are going to face a phenomenal swath of litigation actions. 3i’s reputation is going to be left in tatters. I don’t think they will ever recover from this. This is a phenomenal stitch-up.

“Just how 3i have decided the right business model is to deliberately road crash the business to wipe out anything owed to creditors or the taxman is quite unbelievable, when a higher offer on the table avoids them taking such action. This is bad practice at its worst.”

Agent Provocateur was sold by consultants Alix Partners through a controversial “pre-pack” deal to Four Holdings, which Mike Ashley part-owns. The structure of the deal means Four Holdings can agree to the sale of the assets before buying the business and putting it into administration.

This means the administrator can sell the assets immediately, without consulting the unsecured creditors, who are likely to lose most of their money.

In order to pursue a pre-pack, directors must first show that they have exhausted all other options for a sale and the possibility of keeping the business running as a going concern.

A spokesperson for 3i, which bought Agent Provocateur in 2007, said last year it identified “material misstatements” in the company’s accounts over a number of years that the company’s Board, auditors and 3i as owners, had failed to notice.

“It became clear that the business was not sustainable in its current form and the Board appointed Rothschild to seek new investment for the business to allow it to continue as a going concern. Given the scale of the issues this was not possible,” the spokesperson said, adding that 3i had no role in choosing the buyer and does not expect to recover any money from the sale.

The move from Mr Ashley is the latest of his efforts to move from Sports Direct’s pile-it-high, sell-it-cheap model. Earlier this month the company bought an 11 per cent stake in struggling fashion chain French Connection.

Mr Corré and his then-wife Serena Rees founded Agent Provocateur in 1994 in Soho’s Broadwick Street, when the area was known for sex shops and prostitution.

Its stated aim was “stimulating, enchanting and arousing” wearers, and it immediately whipped up a media frenzy in a Britain still prudish about sex.

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