The Physique Store Owed Extra Than £276 Million to Collectors at Time of Collapse

The Physique Store’s UK arm owed greater than £276 million to collectors together with landlords, suppliers, tax authorities and its worldwide divisions when the moral magnificence retailer collapse in February, it has emerged because it appealed to landlords to chop lease as a part of a rescue deal.

Avon, the cosmetics group owned by The Physique Store’s former mother or father firm Natura, is the largest commerce creditor – owed simply over £13 million for merchandise it manufactured, in response to a report by the directors FRP who have been appointed to the UK arm of the moral magnificence retailer in February.

Whole money owed on the failed group add as much as greater than £276 million, of which £6.3 million is tax owed, £44 million is cash owed to commerce collectors, £63 million is from lease liabilities and different borrowing, and £143 million pertains to “associated suppliers” understood to be different components of the enterprise.

The report doesn’t reveal the extent of additional money owed owed to the group’s largest secured creditor, Aurelius, the German restructuring specialist that purchased the retailer final 12 months.

The non-public fairness firm put the UK arm of The Physique Store into administration in February lower than three months after taking management, placing greater than 2,200 jobs in danger.

In a report revealed on Friday, directors stated they believed they might be capable of increase sufficient money to make sure The Physique Store’s UK tax invoice was paid and that employees would obtain vacation pay, pension funds and different arrears, however they may not define how a lot suppliers, landlords and different unsecured collectors may obtain.

One main asset up on the market would be the model rights to the Physique Store title – price £7.9 million, in response to FRP – which had been considered managed by Aurelius. Nevertheless, the administrator has now established that the switch of the model was not accomplished earlier than The Physique Store’s collapse.

The provision of the model rights might clear the best way for an public sale of The Physique Store, which was beforehand seen as unlikely due to Aurelius’s possession of the model. events are thought to incorporate Subsequent.

The report says The Physique Store collapsed after a $76 million (£60 million) credit score facility was repaid to its former proprietor, the Brazilian group Natura, shortly earlier than the change of possession and leaving the corporate with larger demand for funding than its new house owners had foreseen.

Directors are planning to launch an insolvency course of known as an organization voluntary association, which is meant to chop rents on the group’s remaining shops. No additional retailer closures are anticipated within the UK at this stage.

If the CVA is profitable, Aurelius has agreed to not search compensation of secured loans it made to the enterprise shortly earlier than its collapse.

Since The Physique Store known as in directors, about 82 of the 197 UK shops have closed, with the lack of greater than 425 jobs, whereas an extra 329 jobs have gone at head workplace.

Operations within the US, Germany and Belgium are being shut down after these companies have been both bought off or disadvantaged of money by the administration of the UK mother or father.

The group’s Canadian division closed 30 of its 105 shops, and its Australian and New Zealand operation is struggling to seek out sufficient money to proceed. On Thursday, a court docket in France put the Physique Store’s 66 shops there into administration with the goal of looking for a purchaser for the enterprise.

By Sarah Butler

Study extra:

The Physique Store Recordsdata for Chapter within the US and Canada

The Physique Store has filed for chapter within the US and Canada and is struggling to pay suppliers in Australia because the group’s most worthwhile abroad companies battle with money shortages after its UK mother or father’s collapse final month.

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