After nearly a month’s speculation the mystery buyer of a troubled Scottish fashion chain has been revealed to be the Indian textiles giant S Kumars. Around 1,000 workers were celebrating after an unnamed overseas buyer was reported early May to have purchased Internacionale, which had been put up for sale after its parent company collapsed earlier this year.
The future of the chain became uncertain when the Glasgow-based parent company Ossian Retail Group sold its £25 million debt to an investment company, Agilio. There were rumours the group would be broken up, threatening the livelihood of workers at Internacionale’s 105 stores in Britain, including nearly 30 in Scotland.
Although the buyer was not named there was some speculation that it was from India. Now the Glasgow-based Herald newspaper has revealed the buyer as S Kumars Nationwide Limited (SKNL) – a household brand in India.
However, the sale price is not yet known.
The paper quoted a source as saying May 28 SKNL kept its identity a secret because of “regulatory reasons” but that it would “become public knowledge in a matter of weeks. “It said the regulatory reason may be connected to the May 5 demerger of SKNL’s retail business into a new entity called Brandhouse Retails Ltd.
SKNL, which has ambitious overseas acquisition plans, already retails international luxury brands such as Alfred Dunhill and Escada in India and owns Reid & Taylor and Tamariind.
David Brock, Ossian’s non-executive chairman, confirmed the sale of Inernacionale May 1, adding: “I can tell you that this deal has saved almost 1000 jobs, and I’m very pleased about that.”
SKNL is one of India’s leading textile and apparel companies, whose products are sold in over 30,000 outlets across the country.
Internacionale’s sister company Au Naturale, a homeware retailer, was sold to Elaine McPherson, a Scottish entrepreneur and founder of the fashion chain MK One.
The problems facing Internacionale and Au Naturale are said to be associated with a slump in high street spending in Britain, arising from the global credit crunch, as well as mismanagement.
The two companies were said to have collapsed amid a cashflow crisis, in which they had been unable to meet many of their rent and service charge obligations for their outlets.
Graham Martin, one of three men appointed joint administrators of Internacionale Ltd., which owned and operated both Internacionale and Au Naturale, said in early May the company had suffered financial difficulties for the past nine months.
“The problems were caused partly by the downturn in the retail markets and partly by internal problems – mainly operational difficulties in the supply of stock from its warehouses to the retail outlets,” he said in a statement.
However, David Brock said: “Both companies, Internacionale and Au Naturale, had been trading extremely well. But basically, we lost the support of the banks. That’s what precipitated all the problems in the first place.”
Source: Thaindian