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Background

Founded in Croydon in 1862, Allders grew through the acquisition of other regional department stores to become a 45 store, £800 million turnover public company at its peak. The late 1990s saw a rapid decline set in and by 2005, Allders plc had been significantly loss-making for a number of years and faced administration.

Lenders to the business believed their position was at risk and, believing that they were unlikely to recover a significant proportion of their loans to the company, decided to sell their secured debt positions to a consortium of investors led by Hilco Capital.

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Hilco Capital’s role

  • Acquired £150m of secured debt from Lehman Brothers at substantial discount to par value
  • Appointed by the Administrator to operate the business during the administration
  • Provided £15m of additional working capital to the Administrator to extend the trading period, facilitating a more orderly disposal of the business and assets
  • Sourced and funded an additional £20m of stock
  • Managed supplier negotiations to minimise ROT claims
  • Managed negotiations with concession operators, realising an additional £30m of sales
  • Managed the smooth handover of stores to buyers including Debenhams, BHS and Primark

Results

  • Innovative, proactive approach to retail administrations enabled 30 stores and 3,500 jobs to transfer to major high street retailers
  • Stores continued trading throughout the transfer process, maximising recoveries
  • Closure process realised over £200m of inventory
  • Total recoveries from the administration exceeded the level of secured debt
  • Enhanced recoveries enabled a significant payment to be made to Allders’ pension scheme which had been substantially underfunded at the time of the administration
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