Court appoints provisional liquidator to Principles

A provisional liquidator has been appointed by the High Court to the Principles company of clothing stores which employs 220 people and also to a related shoe company employing 121 people.

Both companies have been affected by the difficulties of their parent Mosaic and it is essential they be sold as a going concern as soon as possible, the court heard.

On petitions of the directors of Principles Retail Ireland Ltd (PRI) and Shoe Studio Ireland Ltd, Ms Justice Mary Laffoy appointed David Carson as provisional liquidator to both companies and returned the matter to March 30th.

PRI had traded profitably until the recent economic down-turn and the particular difficulties affecting the Mosaic group and it is unclear if PRI is solvent or insolvent, Mosaic Finance Director Richard Glanville said in an affidavit.

The PRI Board had resolved earlier this week to seek a provisional liquidator as the company could not continue to trade without rights to the Principles brand, which rights had been sold to Debenhams by the administrators of the English Mosaaic group, Mr Glanville said.

He said the administrators of The Shoe Studio Group Ltd, an English company and sole shareholder of SSI, had sold the intellectual property in the brand names of Shoe Studio to Dune. SSI had therefore no right to continue to trade in Ireland using the Shoe Studio brand name. It also was not entitled to sell products under other shoe brand names with which the English company had licence arrangements, including Jimmy Choo, without entering into new licence arrangements with Dyune.

Mr Glanville said it seemed the English administrators of SSG may have mistakenly sought to include the assets and business of SSI in the sale of the assets and business of SSG as Dune had on March 5th last purported to take over SSI stocks and responsibility for SSI employees.

PRI was incorporated here in January 2007 to acquire the business previously operated by English company Principles Retail Ltd. PRI trades through seven stores and 25 concessions in department stores across Ireland, employs 220 people and has also granted a concession to a jewellery supplier, Shere.

SSI trades through 18 concessions in department stores and employs 121 people.

PRI and SSI were both members of the Mosaic group of companies and were said to have traded profitably until the Mosaic group was affected by financial difficulties. Much of Mosaic's funding requirements were provided through banking facilities with Kaupthing Bank, an Icelandic Bank nationalised by the government of Iceland in October last year.

Mr Glanville said the Icelandic financial crisis was well publicised and this had impacted on the markets' view of the Mosaic group. The forward looking cash flows of the group were also weakened by the fall of Sterling against the dollar.

After Kaupthing indicated on February 26th last it would no longer continue to support Mosaic, the English Mosaic group was placed in administration on March 2nd last. A strategy of selling the share capital of the Irish subidiaries operating Oasis, Karen Millen, Coast and Warehouse was later adopted when Aurora Fashions acquired the business and assets of those companies.