Investors fail to turn suit hire business around

A ROSSENDALE-based suit hire business has called in administrators for the second time in a year.

DLN Group, which owned the Etiquette Formal Hire business, appointed Matt Dunham and Les Ross as joint administrators on January 28.

DLN was set up in February 2010 as a special purpose vehicle to but the business and assets of Etiquette Formal Hire, in a deal which saved around 160 jobs.

It was owned by Edinburgh Woollen Mill Group chief executive Philip Day and Speciality Retail Group chief executive Peter Lucas. The Novak family who founded Etiquette also retained an interest and Peter Novak stayed on as the firm’s managing director.

The business paid £1m for apparel and stock and a further £400,000 for plant and machinery that had previously been owned by Etiquette.

The company supplied retailers with suits, waiscoats and other formal hire either for sale or rental. The new owners were unable to turn the business around, though, and were hit by a decline in the demand for formal wear hire, according to Dunham.

“There has been a drop in the number of people hiring suits for black tie dinners and for weddings,” he said. He added that the number of people within wedding parties hiring formal attire had also been scaled down in many cases.

“We are continuing to trade the company on a limited basis, with a view to achieving a sale of the business,” he said.

“It’s too early to say whether we’ll achieve this or not.”

Dunham added that around 40% of the remaining staff had been laid off since the administrators’ appointment.

Etiquette Formal Hire was started by Czech-born Josef Novak in 1951 and claimed to be one of the largest formal hire companies in the country.

It has its own autmoated warehouse and dry cleaning presses in Rossendale, as well as staff in East Lancashire who specialised in alterations, quality control, packing and distribution.