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Hundreds of jobs under threat at Principles stores
Gideon Spanier6 Mar 2009
Hundreds of London jobs at collapsed womenswear chain Principles were under threat today as rival firm Debenhams was poised to buy its stock - but not its stores.
Principles, which has a flagship store on Regent Street and its corporate HQ on Rathbone Place near Tottenham Court Road, has 91 stories in Britain and Ireland.
The clothing chain employs 2500 staff and also has 300 concessions in department stores, including dozens in the South-East - chiefly Debenhams, House of Fraser and John Lewis.
Principles owner Mosaic Fashions, which collapsed into administration earlier this week, is now in the hands of accountancy firm Deloitte.
There is speculation that Debenhams could buy the Principles brand as well as some of its stock but a spokesman for Debenhams said he could not comment on those reports.
It is understood chief executive Rob Templeman is keen to buy up some of the Principles stock because it does not want its concessions in its own department stores to lie empty.
Principles concession stores within Debenhams reportedly generate as much as £60 million a year in sales.
However, Debenhams is not expected to try to snap up other stock destined for rivals House of Fraser or John Lewis. One other possible suitor, Bhs and Top Shop owner Sir Philip Green, is believed to have looked at Principles but dismissed the idea of buying it. A spokesman for Deloitte could not be reached for comment although a statement was expected later today.
There is speculation the vast majority of Principles' 90 stores will close as a result of any deal. Former Principles boss Peter Davies had tabled a rescue plan but was unable to raise enough cash in time.
Deloitte has been rushing to sell off parts of the Mosaic empire after its key Icelandic investor Baugur went into administation, owing Kaupthing bank £450 million. Kaputhing has taken control of some of Mosaic's key brands such as Karen Millen, Oasis, Coast and Warehouse.
The demise of Principles is yet another blow for the British high street which has seen a swathe of retailers wiped out since the end of last year as consumers tighten their belts.
Rupert Eastell, head of retail at BDO Stoy Hayward said: "February 2009 will go down as being an extremely difficult month for retailers, as the realities of the credit crunch hit their businesses with a resounding thud."
