Less than six months after it was bought out of administration by a team of entrepreneurs, Penny Plain has failed again. BDO Stoy Hayward was appointed administrator to the womenswear marketer on 2nd August.
Penny Plain, which sells by catalogue, the internet and 10 stores, and its Wealth of Nations subsidiary had been sold as a going concern to businessmen Guy Readman, Gerald Stern and Jeremy Middleton this past March. At the time the company’s head office was transferred from Newcastle to its main warehouse in Washington, Tyne and Wear. Seven underperforming shops in the South of England were closed along with three department-store concessions. Since then Joules Clothing has taken on some of the stores in Bath, Chichester and Marlborough and is already trading from them.
Toby Underwood, joint administrator and business restructuring partner at BDO, Leeds, said that certain parts of the business and assets of the company were sold at the end of August to Fashion Direct Ltd. A spokesman for the acquiring company could not comment further than saying a strategic review will now take place.
Whilst the terms of the original rescue deal were not disclosed, a spokesperson for the trio said in a recent statement that “further working capital approaching £1 million” was needed to refinance Penny Plain and that this was “not a viable option in the current economic climate”. Former managing director Nick Oliver reportedly parted company with the business just three months after the new owners bought it.
“Retailers have had a tough time, particularly over the past few months, as the interest-rate rises begin to impact on consumers and the midmarket becomes increasingly competitive,” Underwood said.
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