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KMPG sells La Senza in pre-pack deal

10th Jan 2012
Contributing Editor accountingWEB
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AIA

Alshaya, an Arabain retail group, has bought lingerie chain La Senza in a pre-pack deal administrated by KPMG.

The firm was bought by equity firm Lion Capital from Dragons’ Den star Theo Paphitis in 2006 for £100m but last month La Senza filed for administration, citing “trading conditions” and the “macro environment” as reasons for its failing. The high-street chain also announced last week that it is to close 81 of its 146 stores.

Paphitis took to Twitter to say: “I would like to say good evening but some how it doesn't feel right with so many job loses with @LaSenzaUK going into admin!”

The retail company that employs 1,100 staff appointed KPMG partners Richard Fleming, David Standish and Rob Croxen to administrate the deal. Alongside naming the buyer on appointment, KPMG also announced that a further three stores and 18 concessions would be closed.

Fleming, UK head of restructuring at KPMG, said: “We are delighted that we have been able to rescue part of La Senza UK and such a large number of jobs, given the negative economic pressures faced by retailers in the UK.”

He added: “Alshaya is a leading international retail operator with long standing links with the UK as the international franchise partner of a string of high street brands. This deal recognises the value of La Senza as a strong and popular high street brand with a loyal customer base.”

The pre-pack administration deal is the second in quick succession for KPMG, following last week's sale of Blacks Leisure to JD Sports.

Pre-packaged administrations where the sale is arranged before the administrator is chosen continue to cause controversy. The process ensures a swift and seamless transition for struggling businesses, but many creditors are left with more than just a sour taste in their mouths as their debts are written off.  

AccountingWEB member Metrobit said of the Blacks Leisure deal: “The pre-pack will save some jobs and I suppose in some respects the company, but the people paying for this are the suppliers and creditors, and doubtless when the list comes out the Revenue will be one of the biggest ones, so actually it affects us all.”

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By Gina Dyer
10th Jan 2012 17:21

Horaay!

I'm just relieved it's going to be saved. That's where I get all my knick knacks from! 

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By ksagroup
13th Jan 2012 10:38

Pre packs

Unfortunately in any insolvency many creditors have a "sour taste" in their mouth as their debts are written off.  The problem with pre packs is the lack of transparency and when the business is sold to connected parties.  Some banks wont allow a sale to connected parties.

 

It should be remembered that the banks always have first pickings ahead of employees and HMRC and other trade creditors whether it is a straightforward administration, prepack or liquidation.   

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