Stores sale protects 2,700 jobs
The owner of womenswear chains Ann Harvey and Kaliko has been saved from collapse as it was bought out of administration by a private equity firm in a deal set to protect nearly 3,000 jobs.
Alexon, which employs 2,700 staff across more than 990 outlets in the UK and Europe, was bought by Sun European Partners, owner of sofa chain ScS, in a pre-pack administration deal for an undisclosed sum.
The widely-expected sale comes shortly after Luton-based Alexon, which owns brands including Dash and Eastex, suspended its shares after it failed to find a solution to its funding problems.
The firm, one of a number of retailers hit by a consumer spending squeeze, warned earlier this month that profits would be "well below" expectations following a sales slump.
Will Wright, joint administrator and restructuring director at KPMG who led the sale, said Alexon had received a "great deal of interest". He said: "Today's deal draws a line in the sand for Alexon and puts it on a more solid footing for the future."
The deal means unsecured creditors, including suppliers and HM Revenue & Customs, will lose a combined total of £12 million, while its lender, Barclays, is owed around £15 million, but should recoup this as a secured creditor.
Shareholders have been wiped out by the administration. The company suspended shares this morning at 2.8p, giving Alexon a market value of around £4 million.
Alexon's woes come shortly after fellow fashion chain Jane Norman fell into administration. Edinburgh Woollen Mill bought 33 stores but no buyer was found for a further 35, impacting on 290 jobs.
Alexon, like Jane Norman before it, has struggled with its cash position amid falling sales and had been considering a number of options to restructure the business.
The company, which can trace its origins back to the Alexon fashion house established in 1929, reported an 8% drop in total sales in the first six months as it slowed its opening programme to conserve cash.