// Cath Kidston creditors owed £90 million after administration
// Retailer’s online, franchse & wholesale was bought back by Baring Private Equity Asia in a pre-pack deal last month
// Cath Kidston’s creditors include landlords, HMRC and gift cards
Cath Kidston’s unsecured creditors are owed around £90 million but are expected to only receive a small dividend after the retailer’s pre-pack administration.
Last month the retailer was sold back to parent company Baring Private Equity Asia for £17.8 million in a pre-pack deal, that saw it only acquire the online, franchise and wholesale arms of Cath Kidston.
The deal results in the closure of 60 stores in the UK and 908 staff redundancies.
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According to Companies House documents filed by administrators from Alvarez & Marsal, Cath Kidston’s creditors include landlords, HMRC and gift cards.
The files show unsecured claims of £90 million and states that “as the retail stores will now be surrendered to the landlords the level of their claims could rise significantly when loss of rent and dilapidations claims are made”.
Alvarez & Marsal has not yet confirmed the exact dividend amount for unsecured creditors, as it was subject to completing the “realisation of assets and payment of associated costs”.
While Cath Kidston’s British stores would not reopen after the coronavirus lockdown is lifted, the retailer would continue to trade via online and wholesale in the UK.
Its chain of stores internationally are unaffected by the administration.
Only around 70 of Cath Kidston’s staff were retained as part of the pre-pack deal with Baring Private Equity Asia.
Advisers from Alvarez & Marsal were initially drafted in March 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.