In a high-stakes round of hokey cokey, the private equity firm that put shoe retailer Brantano into administration has bought it back again.
That's good news for the 1,372 people employed at the 81 shops and 59 concessions bought by Alteri but it’s not a perfect solution. The deal itself is pretty controversial – the private equity firm did own the discount store before it collapsed and there are residual questions over just how much suppliers might miss out on as a result of this buy-back.
It's not unheard of for companies to go into administration, only for the original owner to swoop in when the debts have been radically reduced and buy it again. But it's far from the ideal scenario for those who might not get back what they're owed, from suppliers to employees to the taxman.
At Brantano, there are also still 600 people at risk of losing their jobs. Alteri chose not to purchase 58 other stores. Its chief exec Gavin George said his company had tried to arrange an agreement with Brantano’s landlord about reducing its rent bill before it called in administrators. He also sought to smooth more than a few ruffled feathers about the prospect of suppliers missing out on overdue payments.
‘It is unlikely that many are going to lose out,’ he claimed. ‘We tried really, really hard to undertake the restructuring solvently, but we were unable to do so. This is the only way we could restructure the business to give it a good go-forward position.’ Good might be stretching it a little.
Alteri originally paid £12m for the business in October along with Jones Bootmaker, from Dutch firm Macintosh. The outlook hadn’t looked nearly so bleak earlier in 2015, when Brantano opened up 36 new stores.
Administrators from PwC ran the Leicester-based firm while the search went on for a buyer, and said Brantano had fallen victim to changing consumer habits. Alteri specialises in turning around stuttering retail businesses, but it'll have its work cut out to polish up the shoe chain once more.
It took a particularly hard knock amid the difficult festive period for retailers – consumers' increasing move online meant the high street suffered, while warmer than average weather cooled demand for winter fashion. Verdict Research analyst Navindya Sharma told Sky News that Brantano’s 'proposition had no differentiating factor’, which meant it suffered more than most.
The plunge into administration reflects just how precarious Brantano’s high-street place is. The looming threat of considerable redundancies – PwC said they'd be 'inevitable' should further sales fail to materialise – means the buyout isn't a move that will be celebrated across the board. Still, it’s one step at a time and the Alteri rescue effort at least gives the discount retailer the chance to become commercially viable once more.