Cath Kidston u-turns to pay wages owed to staff made redundant

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Cath Kidston agrees to pay wages owed to staff made redundant
On Tuesday, Cath Kidston announced it would permanently shut all 60 of its UK stores, resulting in the loss of 908 jobs. (Image: PA)
// Cath Kidston agrees to pay 3 weeks of wages owed to staff made redundant
// Affected staff were initially told – less than a week before payday – they would not be paid at all
// 908 staff were made redundant on Tuesday when Cath Kidston fell into administration

Cath Kidston has agreed to pay three weeks of wages owed to staff made redundant after initially telling them less than a week before payday that they would not be paid at all.

When 908 staff members were made redundant after Cath Kidston fell into administration on Tuesday, it was done so with immediate effect and they were reportedly told that they would not see any income on payday tomorrow.

However according to Drapers, Cath Kidston chief executive Melinda Paraie wrote to UK staff on Wednesday to assure them that those who were made redundant would be paid what they’re owed for the period between April 1 and April 20.


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She also said the handful of other staff who are still employed but are currently on furlough due to the lockdown would receive 80 per cent of their usual salary up to a £2500 cap, as per the government’s Coronavirus Job Retention Scheme.

While she warned the retailer would not be able to process the salaries owed on time for tomorrow’s scheduled payday, she said it would be processed by the end of this month.

“I apologise for the delay in being able to share this information with you, and the anguish that this has caused,” Paraie wrote in her letter.

“I can assure you that there has been a lot of work behind the scenes to ensure that these critical payments can be made to you.”

On Tuesday, Cath Kidston announced it would permanently shut all 60 of its UK stores, resulting in the loss of 908 jobs after parent company Baring Private Equity Asia secured a pre-pack administration deal that saw it buy back the online business, brand and wholesale arm from administrators Alvarez & Marsal.

This means Cath Kidston’s British stores would not reopen after the coronavirus lockdown is lifted, and the retailer would now only trade via online and wholesale in the UK.

The retailer’s chain of stores internationally are unaffected by the administratoon.

Baring Private Equity Asia added that just over 70 of Cath Kidston’s staff will see their jobs secured as part of the deal.

Advisers from Alvarez & Marsal were initially drafted last month to undertake an urgent review of Cath Kidston’s strategic options, which at the time had been racing to find a new buyer as the impact of the coronavirus pandemic pushed the loss-making retailer over the edge.

Baring Private Equity Asia became a substantial shareholder in Cath Kidston in 2014 before it took full control in 2016.

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