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Internacionale rescued by pre-pack deal Internacionale rescued by pre-pack deal
(2 months later)
High street women's fashion chain Internacionale has been rescued from administration by a controversial pre-pack agreement, with 1,550 jobs saved.High street women's fashion chain Internacionale has been rescued from administration by a controversial pre-pack agreement, with 1,550 jobs saved.
The bargain retailer will continue operating 114 stores across the country, but 18 have shut, with staff given just one week's notice that they would lose their jobs.The bargain retailer will continue operating 114 stores across the country, but 18 have shut, with staff given just one week's notice that they would lose their jobs.
The new business, International UK Ltd, has been bought by the previous owners for an undisclosed fee. The most recent accounts filed at Companies House show the company had £19m of debts, including a £9.4m loan from the firm's biggest investor.The new business, International UK Ltd, has been bought by the previous owners for an undisclosed fee. The most recent accounts filed at Companies House show the company had £19m of debts, including a £9.4m loan from the firm's biggest investor.
The owners are former chief executive Raj Sehgal, managing director Naresh Abrol and former finance director William Milton. All three are expected to run the new company in the same positions.The owners are former chief executive Raj Sehgal, managing director Naresh Abrol and former finance director William Milton. All three are expected to run the new company in the same positions.
It is not known how much external creditors could lose. The business filed an intention to enter administration last month, while secret negotiations took place for a pre-pack takeover.It is not known how much external creditors could lose. The business filed an intention to enter administration last month, while secret negotiations took place for a pre-pack takeover.
Pre-pack administrations have been criticised in the past for not giving creditors the opportunity to be part of any behind-the-scenes talks.Pre-pack administrations have been criticised in the past for not giving creditors the opportunity to be part of any behind-the-scenes talks.
Tom Jack, joint administrator for Ernst & Young,, said: "High street retailers have faced unprecedented conditions over recent years, and the market for fashion clothing has become increasingly competitive.Tom Jack, joint administrator for Ernst & Young,, said: "High street retailers have faced unprecedented conditions over recent years, and the market for fashion clothing has become increasingly competitive.
"The business has been significantly loss making over recent years and although the directors have sought to restructure and reposition Internacionale, with significant cash investment from shareholders, it has not proved possible.""The business has been significantly loss making over recent years and although the directors have sought to restructure and reposition Internacionale, with significant cash investment from shareholders, it has not proved possible."
He said business would continue as usual and the new owners would honour gift vouchers and accept returns of clothes bought before the administration.He said business would continue as usual and the new owners would honour gift vouchers and accept returns of clothes bought before the administration.
Sehgal, who bought the company out of administration from the previous owners in 2008, took over the running of Internacionale in 2011 to oversee a turnaround.Sehgal, who bought the company out of administration from the previous owners in 2008, took over the running of Internacionale in 2011 to oversee a turnaround.
The businessman, worth an estimated £130m, made his fortune selling South Shields-based clothing company Visage in 2010 for £175m.The businessman, worth an estimated £130m, made his fortune selling South Shields-based clothing company Visage in 2010 for £175m.
Meanwhile, toy and hobby chain Modelzone is set to close with the loss of 355 jobs after administrators for the collapsed retailer failed to find a buyer.Meanwhile, toy and hobby chain Modelzone is set to close with the loss of 355 jobs after administrators for the collapsed retailer failed to find a buyer.
The company has endured years of tough trading conditions after a disastrous expansion plan left it with a hefty rent bill it could not afford.The company has endured years of tough trading conditions after a disastrous expansion plan left it with a hefty rent bill it could not afford.
Administrators from Deloitte said they had received a few inquiries but no offers for the business, and the 47 stores will start to shut in the next few weeks.Administrators from Deloitte said they had received a few inquiries but no offers for the business, and the 47 stores will start to shut in the next few weeks.
Modelzone, selling everything from model cars to aircraft and train sets, will disappear from the high street completely unless a last-minute buyer is found, however, a takeover is thought to be highly unlikely.Modelzone, selling everything from model cars to aircraft and train sets, will disappear from the high street completely unless a last-minute buyer is found, however, a takeover is thought to be highly unlikely.
The website has already been shut down and the stores will start a fire sale to shift the remaining stock. Gift vouchers can still be used, but at 50% of their face value.Modelzone made an operating loss in 2012 of £750,000 and was pushed into administration shortly after the quarterly rent payment day at the end of June – a deadline notorious for putting under struggling retailers.The website has already been shut down and the stores will start a fire sale to shift the remaining stock. Gift vouchers can still be used, but at 50% of their face value.Modelzone made an operating loss in 2012 of £750,000 and was pushed into administration shortly after the quarterly rent payment day at the end of June – a deadline notorious for putting under struggling retailers.
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