A group of suppliers is reportedly considering legal action against the failed fashion retailer Jeager as they have been left millions of pounds out of pocket due to its name and trademark being sold to a mystery buyer.
Following its collapse into administration last month, seeing 20 of its 46 stores shut and 200 of its 700 staff lose their jobs, companies like Portuguese clothing supplier Calvelex are considering “court action to examine the actions of the company directors”.
Calvelex attempted to rescue the retailer with a takeover bid, but turned away when it was revealed the rights to the name had been sold to an unknown party.
“We were very disappointed with this situation and question the thinking behind selling the intellectual property of the Jaeger brand name before the company went into administration since without it the value to potential bidders would be greatly reduced,” Calvelex boss CÃ©sar AraÃºjo said.
The retailer collapsed into administration after its owner Better Capital failed to lift its financial fortunes out of the gutter. Better Capital put Jaeger up for sale, although a buyer failed to come forward before the administration process started, £7 million worth of its debt was sold off to the mystery party.
Unconfirmed reports suggest this buyer could be Edinburgh Woollen Mill‘s Philip Day. Whoever bought the retailers debts is a secured creditor, so stands in poll position to be repaid as the administration process continues.
Better Capital boss John Moulton told The Guardian: “Extensive efforts were made to find a buyer and buyers certainly had a chance to bid in any format.”
“The transaction was effectively to sell control of Jaeger, including its brand, and was done without insolvency. Any insolvency actions lie with the (Better Capital) fund‘s successor.”