A clothes distributor which produced global brands such as Levis, Ben Sherman and Ecko has been rescued out of administration.
Power Play Textiles – which supplied its licensed stock across Europe, the US and Asia – was snapped up as part of a pre-pack deal.
The arrangement safeguarded the company’s 30 employees and saw the same management resume control of the business.
Joint administrators Philip Duffy and Steven Muncaster, of Duff & Phelps, oversaw the deal which saw the business acquired by Power Play Brand.
The north-west-based business – which supplied to Debenhams as well as a host of other retailers – was essentially responsible for branding its clothes stock.
Case manager Andrew Knowles, of Duff & Phelps, explained the company succumbed to administration after suffering from funding and rent difficulties.
He said: “The company was profitable up until last year.
“But its funding was pulled by Natwest after it grew concerned about the licensed nature of the products and therefore the value of its security.
“Without a license in place the stock was worthless.
“Property was also very expensive for the company, they tried to negotiate with their landlord but he wouldn’t budge.
“Its premises were costing the company circa £500,000 a year.
“They had also lost a tenant in the building, which previously contributed about £100,000 in rent.
“There were no other options (but to go into administration).”
Power Play – which also had the license to recreate Disney, Mr Men and Forever Friends characters on its goods – specialised in underwear, swimwear and socks.
According to the company’s latest accounts filed until February this year, the company had a turnover of £11,094,934.
Power Play, based in Royton, recorded a post-tax profit of £140,358 and also boasted net assets of £1,714,429.
By Andy Pearce
Subscribe to Insolvency Today