Page last updated at 14:57 GMT, Friday, 2 May 2008 15:57 UK

Invoice worries as MK One is sold

By Joe Lynam
Business Reporter, BBC News

Screen grab from MK One website
MK One has struggled recently in a tough retail environment

Retailer MK One has been sold to restructuring specialists Hilco amid concerns by suppliers about when outstanding invoices would be paid.

Refusing to give any details, the ladies and children's fashion retailer merely confirmed that it had been sold by the Icelandic group Baugur to Hilco.

Suppliers told the BBC they had not had any assurances from MK One or Hilco as to when invoices would be paid.

MK One operates 170 stores around the country, employing 2,500 people.

Invoice concerns

The firm has been struggling over the past few years amid intense competition in the British retail environment.

Cheques to some suppliers were stopped by the retailer during the sale process which lasted a month, firms told the BBC.

One supplier Panda Sourcing told the BBC that it was "owed a good chunk of money” and that outstanding invoices were "of major concern" to the company.

Other suppliers, which preferred not to be named, expressed fears of the "knock-on effect" for them and their suppliers in the Far East if their invoices weren't settled quickly.

Much of the suppliers' anger was directed at the previous owners Baugur for "not letting people know what was going on".

Even MK One's own fashion buyers had been "kept in the dark by the owners", according to the director of one knitwear supplier which is owed a "six figure sum" by the retailer.

Losses

Baugur, which owns Hamleys and House of Fraser, put MK One up for sale a month ago having endured losses for a number of years.

The Reykjavik based Baugur had bought MK One in 2004 for £44m plus £11m of debt.

The sale process, which had been managed by Deloitte, ended on Thursday night when it was confirmed that Hilco had bought MK One as a going concern for an undisclosed sum.

Hilco, which focuses on turning struggling retail companies around – usually by breaking them up and selling them off in smaller parts - refused to comment on the suppliers' claims.

The firm was central to the break-up of the Allders chain of department stores in 2005.


SEE ALSO
The Vikings are coming
23 Nov 06 |  Magazine
Baugur: The iceman cometh
09 Feb 05 |  Business

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