- Vivian Hendriksz |
London - Not everyone is pleased with the sudden sale of Agent Provocateur to Mike Ashley's held Four Holdings. Co-founder of the luxury lingerie retailer, Joe Corré, has called the deal "a disgrace to British business" and "preposterous" following news of the sale Thursday evening.
Corré, son of designer Dame Vivienne Westwood and legendary manager of the Sex Pistols Malcolm McLaren, told the Guardian that both Agent Provocateur's former owner, private equity fund 3i Group, and Ashley, are set to face "a phenomenal swath of litigation actions" over the deal. Billionaire Mike Ashley is thought to have purchased Agent Provocateur for between 27 and 30 million pounds through his investment vehicle Four Holdings, which is the parent company of Four Marketing. The latter is a fashion agency which oversees the operation of a number of websites for luxury brands and holds their flagship stores, of which Sports Direct owns a 25 percent stake in.
Joe Corré calls Agent Provocateur pre-pack administration deal "preposterous"
What makes the sudden deal controversial is that fact it was completed through a pre-pack administration, which saw Agent Provocateur placed into insolvency before being sold off and thereby scrap off its mounting debt to creditors before its remaining assets were immediately snapped up by its new owner, Four Holdings. AlixPartners, the administrator appointed to Agent Provocateur, declined to share the current amount Agent Provocateur had prior to the deal, which makes the sale even more dubious.
"The pre-pack arrangement between 3i and Mike Ashley’s Sports Direct is a disgrace to British business up there with Sir Philip Green’s shocking behaviour over BHS," added Corré. "If this preposterous deal goes ahead with Mike Ashley, 3i and their partners are going to face a phenomenal swath of litigation actions. 3i’s reputation is going to be left in tatters. I don’t think they will ever recover from this. This is a phenomenal stitch-up."
"Just how 3i have decided the right business model is to deliberately road crash the business to wipe out anything owed to creditors or the taxman is quite unbelievable, when a higher offer on the table avoids them taking such action. This is bad practice at its worst." At the moment it remains unclear what will happen with the luxury brand's 600 employees and retail chain, which counts 11 stores across the UK.
However, the format of the deal as a pre-pack administration means that funding 3i invested to help Agent Provocateur battle against sluggish sales last year will be paid to the creditors of the brand, although 3i is unlikely to get any of the proceeds from the deal. Corré, who co-founded the brand in 1994 with his former partner Serena Rees before selling a majority share to 3i for an estimated 60 million pounds in 2007, claims 3i also turned down a higher offer for the lingerie retailer from Quadro Capital, a investment company which would have protected the brands employees as well as its creditors.
He states that Ashley is set to "pick at the carcass" of Agent Provocateur and only aims to "the keep the brand and the stock and nothing much else." Other sources said to be close to 3i argue the group did not have a hand in the final choice of a buyer, as the sale proceedings of the lingerie retailer had been taken over by AlixPartners on behalf of Barclays, Agent Provocateur main creditor, after 3i failed to attract fresh investment for the brand. Following Corré sale to 3i, he remained on board as Creative Director, he eventually left the brand in 2009 before selling his remaining share. He was also involved with a legal dispute with 3i prior to the Agent Provocateur sale to Ashley.
Photo Credits: Homepage By WestportWiki (Own work) [CC BY-SA 3.0 ( http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons
Photo 2: Agent Provocateur Lingerie Agent Provocateur - Summer Campaign, via Flickr