FAITH

Background

Faith Shoes was a premium retailer of footwear and accessories in the UK and Ireland. The business operated from 78 standalone stores, 126 department store concessions and a transactional website, turning over £72 million at its peak.

The business suffered from challenging trading conditions during the 2008 economic downturn and entered administration. Despite being acquired by a new management team who sought to negotiate reduced rental costs, revitalise the brand and refurbish flagship stores, the business continued to lose money and was under threat of receiving a winding up petition from its creditors.

Hilco Capital’s role

• Acquired the bank’s security
• Appointed by the company’s Administrators to manage retail operations while a buyer was sought
• Worked with Faith’s management to quickly understand the profitability of each store and concession
• Following this exercise, it became apparent that many of the stores had become substantially loss making
• Launched a store closing sale in the absence of credible offers for the business as a going concern
• Worked with the Administrators to negotiate the onward sale of the concession business, residual stock and the Faith brand

Results

• £3 million trading profit achieved for the company’s creditors through the store closing sale
• Going concern sale of the concession business to Debenhams achieved, preserving 600 jobs
• Brand sold for a seven figure sum to the benefit of the Faith’s creditors
• Hilco Property negotiated a lease premium for assigning the former flagship Oxford Street store