Ziff family complete Stylo rescue deal

STYLO chairman Michael Ziff has completed a rescue deal for part of the struggling shoe group which will see 2,500 jobs saved.

Mr Ziff and fellow directors including his brother Edward, the chief executive of property group Town Centre Securities, used family funds plus support from Lloyds TSB bank to seal a deal for 160 of the group’s Barratt and PriceLess shops and another 160 concessions in stores operated by groups including Arcadia and the Co-op.

The remaining 220 stores are to close immediately with the loss of the remaining 2,500 jobs.

Mr Ziff, whose family owned 65% of Stylo, said that he was relieved to have completed the deal and was now looking forward to the future.

“At the end of the day, that is all that we have managed to rescue in this marketplace. I’m now looking forward to a new phase of the business and let’s get our heads down and get on with some real business.”

Law firm Walker Morris acted on the acquisition by a newly formed company funded and controlled by the Ziff family. 

The assets included a considerable number of stores and concessions, the e-commerce business and the Stylo, Barratt and PriceLess brands.

A team of insolvency, corporate, banking and property lawyers led by Walker Morris chairman, Peter Smart, put the deal to bed in just seven days.

Mr Smart commented: “It is regrettable that the innovative CVA proposals that would have saved this iconic company were voted down by certain creditors. 

“Nevertheless, this acquisition from the administrators has preserved these famous brands and saved jobs across the UK,” he added.

Neville Kahn, Deloitte partner and joint administrator, said: “Given the difficult trading environment, we are pleased to have achieved a deal which will save 160 Stylo stores and 165 concession outlets across the UK and Ireland, thereby safeguarding 3,000 jobs.

“Due to difficult short term financial difficulties and the long term sector outlook, however, the store portfolio was deemed to be too large, and unable to generate sufficient profits to cover its cost base. 
 
“We will be working closely with the Redundancy Payments Office and Job Centre Plus to provide support for all staff, which will include a fast track process for paying redundancy entitlements. We are extremely grateful to the staff and management for their support throughout this difficult period.”

Mr Ziff added: “Banks are not very popular at the moment, but Lloyds have been really good.”

A team from law firm Addleshaw Goddard advised Lloyds TSB. The team was led by Martin O’Shea with Tim McNamara and Caroline Grey (banking) and John Duffy and Sonia McMahon from business support and restructuring.

The Bradford-based shoe group was formally placed in administration this week following the rejection of a rescue plan by its creditors.

Mr Kahn, Dan Butters and Lee Manning of Deloitte were appointed administrators and the group, which has 5,450 employees and 500, looked to have a bleak future.

The struggling company had put forward an innovative Company Voluntary Arrangement (CVA) to its creditors as an alternative to a pre-pack administration when PriceLess and Barratts fell into administration on January 26.

Under the scheme, landlords and creditors were asked to renegotiate debts so the company could stay afloat. However that move was rejected last week, threatening the whole of the company’s future.