Clothing company goes into bankruptcy protection (AP)

Monday, December 29th, 2008 | Finance News

LONDON – British clothing company USC filed for a form of bankruptcy protection Monday, as the economic downturn claimed another major UK retailer.

Edinburgh, Scotland-based USC, a retailer that sells clothing brands such as Diesel, Lacoste and Ted Baker in Britain, went into administration, said PKF, the company's administrator.

Meanwhile, British children's clothing retailer Adams Childrenswear Ltd. is seeking bankruptcy protection. The 75-year-old central England-based concern was expected to be placed in the hands of administrators at PricewaterhouseCoopers later Monday, spokeswoman Ginette Gisborne said. PricewaterhouseCoopers declined to comment.

USC and Adams are the latest in a series of big British retail brands to be hit by the economic turmoil — 99-year-old general store Woolworths, tea and coffee merchant Whittard of Chelsea and music chain Zavvi, have already been forced to file for administration.

About 200 Woolworths stores closed Saturday and the remainder are expected to close over the next week unless a buyer is found. Whittard has been sold.

USC's administrator Bryan Jackson said he had already secured the sale of 43 of the retailer's 58 stores to Dundonald Holdings Ltd., saving 1,127 jobs. But, he said, the remaining 15 stores had not yet been able to secure a deal, putting around 300 jobs at risk. Those stores will be temporarily kept open.

The picture at Adams is less clear. Gisborne said the company was not yet in administration and that the company did not yet know if the stores would remain open, close or be sold.

Adams employs around 2,000 people, has 260 stores in Britain and over 100 international outlets in the Middle East and Europe. It is owned by Northern Ireland businessman John Shannon, who bought it out of administration less than two years ago.

It supplies clothes for the retail chain Boots and sells clothes through its own outlets.

The news that USC is in administration and Adams is on the brink of collapse comes after insolvency specialist Begbies Traynor predicted last week that as many as 15 "major" British household-name retailers could fail by the middle of January.

In total, 356 British retail companies collapsed during the third quarter of 2008 — 39 percent more than the same period last year — according to The Insolvency Service.