Stylo chairman Michael Ziff has completed a rescue deal for part of the struggling Bradford-based shoe group which will see 3,000 jobs saved.
Ziff, as predicted by Property Week last week, and fellow directors including his brother Edward, Town Centre Securities’ chief executive, used family funds plus support from Lloyds TSB bank to seal a deal for 160 of the group's Barratt and Priceless shops and another 160 concessions in stores operated by groups including Arcadia and the Co-op.
Ziff, whose family owned 65% of Stylo, said that he was ‘relieved’ to have completed the deal and was now looking forward to the future.
‘At the end of the day, that is all that we have managed to rescue in this marketplace. I'm now looking forward to a new phase of the business and let's get our heads down and get on with some real business,’ he said.
The troubled shoe group was formally placed in administration this week following the rejection of a rescue plan by its creditors.
The assets included a considerable number of stores and concessions, the e-commerce business and the Stylo, Barratt and Priceless brands.
Neville Kahn, Dan Butters and Lee Manning of Deloitte were appointed administrators and the company had put forward an Company Voluntary Arrangement (CVA) to its creditors as an alternative to a pre-pack administration when PriceLess and Barratts fell into administration on 26 January.
Under the scheme, landlords and creditors were asked to renegotiate debts so the company could stay afloat. However that move was rejected last week, and the whole group went into administration.
The administrators said: 'Given the difficult trading environment, we are pleased to have achieved a deal which will save 160 Stylo stores and 165 concession outlets across the UK and Ireland, thereby safeguarding 3,000 jobs. Due to difficult short term financial difficulties and the long term sector outlook, however, the store portfolio was deemed to be too large, and unable to generate sufficient profits to cover its cost base. As a result, the remaining 220 stores will be closed imminently, with the regrettable loss of 2,500 jobs.
'We will be working closely with the Redundancy Payments Office and Job Centre Plus to provide support for all staff, which will include a fast track process for paying redundancy entitlements. We are extremely grateful to the staff and management for their support throughout this difficult period.
'Whilst the core focus of the Administrators was on the delivery of the CVA, we were aware that there was significant risk that it would not be approved. In order to plan for a failure of the CVA, since our appointment we have also run a formal sale process to identify buyers for all or part of the business. The deal that was achieved as a result of this process means that the Barratts and Priceless brands will continue on the high street.'