Penny Plain collapses again

Less than six months after it was bought out of administration by
a team of entrepreneurs, Penny Plain has failed again. BDO Stoy
Hayward was appointed administrator to the womenswear marketer on
2nd August.

Penny Plain, which sells by catalogue, the internet and 10
stores, and its Wealth of Nations subsidiary had been sold as a
going concern to businessmen Guy Readman, Gerald Stern and Jeremy
Middleton this past March. At the time the company’s head office
was transferred from Newcastle to its main warehouse in
Washington, Tyne and Wear. Seven underperforming shops in the
South of England were closed along with three department-store
concessions. Since then Joules Clothing has taken on some of the
stores in Bath, Chichester and Marlborough and is already trading
from them.

Toby Underwood, joint administrator and business restructuring
partner at BDO, Leeds, said that certain parts of the business
and assets of the company were sold at the end of August to
Fashion Direct Ltd. A spokesman for the acquiring company could
not comment further than saying a strategic review will now take

Whilst the terms of the original rescue deal were not disclosed,
a spokesperson for the trio said in a recent statement that
“further working capital approaching £1 million”
was needed to refinance Penny Plain and that this was “not
a viable option in the current economic climate”. Former
managing director Nick Oliver reportedly parted company with the
business just three months after the new owners bought it.

“Retailers have had a tough time, particularly over the
past few months, as the interest-rate rises begin to impact on
consumers and the midmarket becomes increasingly
competitive,” Underwood said.


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