The events which led up to the luxury fashion business of British designer Amanda Wakeley, made famous for dressing the likes of Princess Diana and the Duchess of Sussex, collapsing into administration have been revealed.
The fashion label, which was also behind Theresa May’s 'trousergate', entered administration in May and cut the majority of its workforce having already closed its flagship store in Mayfair.
The firm was best known for its dresses, bridal and occasion wear and also had concessions at Harvey Nichols and Harrods. It was also represented in Europe, the Middle East and North America.
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The brand, which was launched in 1990 and was backed by AGC Equity Partners in 2012, had planned to launch in 2021/2022 into the USA but the move was put on hold due to the Covid-19 pandemic.
Clare Lloyd and Colin Hardman of Smith & Williamson, who were appointed as joint administrators of AW Retail Ltd, have now complied a document for creditors which details the events prior to the company's collapse.
When the administrators were appointed, 12 non-disclosure agreements were entered into regarding the purchase of stock while nine members of staff were made redundant.
In the document, the administrators added that, at present, they are anticipating paying a dividend to both ordinary and secondary preferential creditors, and, based on current stock sale projections, a dividend to unsecured creditors.
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The document said that, as with many retail businesses, the company experience a "dramatic reduction" in turnover as a result of the Government lockdowns.
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From September 2020, management started a restructuring programme which saw the business streamlined to maximise its online sales and a number of redundancies were made. Cost efficiencies were also negotiated over supplier contracts and payment terms.
The administrators added that it was decided new investment would be sought, with a view of selling the business and Amanda Wakeley retaining a role.
However, in early 2021 the management were told by investors that there would be no additional funding, necessary to be able to meet the ongoing liabilities of the business, with "cash flow becoming critical within a matter of weeks".
Despite the additional support provided by carious Government schemes, "this was insufficient to support continued trading beyond the short term.
Smith & Williamson was first approached by the company's private equity investor in late January 2021 to provide advice over possible options regarding its financial position.
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The administrators' document said: "Whilst it was not possible to secure a going concern rescue of the business, the rationale for continuing trading during the advisory period whilst seeking a buyer, was additionally supported by an improved position for creditors, than had been originally anticipated.
"With no offers forthcoming and following the safe receipt of significant debtors that were outstanding...it was decided by the sole director that it was appropriate to appoint administrators."
The company's ordinary preferential creditors are estimated to be a maximum of £12,270, comprising arrears of wages, untaken holiday and payment owned during the insolvency period.
The value of the firm's secondary preferential creditor, HMRC, is estimated to be a maximum of £129,936, while the payments due to unsecured creditors total c.£684,000.
The administrators added that once the process is completed, the company will be liquidated.
Amanda Wakeley grew up in Cheshire and was educated at Cheltenham Ladies College.