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Theo Fennell loses sparkle as insolvency looms

Business News

BUSINESS / Business News 12 Views comments

The upmarket jeweller Theo Fennell has been forced to call in administrators four years after a takeover by a consortium of high-profile investors.

Sky News has learnt that BDO, the professional services firm, was appointed as administrator to Theo Fennell on Thursday.

BDO is understood to have approached prospective buyers, including the turnaround investment firm Rcapital, straight after its appointment.

The collapse of Theo Fennell, which employs just 50 people, will nevertheless reverberate through the retail sector, given the brand's visibility.

Set up by its eponymous founder in 1982, the company specialises in creating unusual - and expensive - jewellery pieces and silverware, such as a recent Tequila shot set modelled on a US space shuttle priced at £18,000.

The company was listed on London's junior AIM stock market until August 2013, when it was taken private by a vehicle whose backers included Jon Moulton, the financier, and Sir Keith Mills, the entrepreneur behind the Air Miles and Nectar loyalty programmes.

That deal valued the business, which trades from locations such as Harrods as well as its own flagship Chelsea store, at just £3m.

Sources said that the growing weight of Theo Fennell's fixed cost base had been a major factor in the ability of management to execute the company's own restructuring plan.

Another insider also pointed to ongoing instability within Theo Fennell relating to its strategy, with protracted uncertainty about the role of the founder, and the replacement some time ago of Mike Jatania, the cosmetics tycoon, as its chairman.

An unspecified number of Theo Fennell's staff are already understood to have been made redundant.

Matthew Tait, BDO business restructuring partner, said the firm was "in receipt of a number of expressions of interest".

He said: "Unfortunately, the financial burden of certain fixed costs have weighed heavily upon the company as it implemented its own restructuring plan.

"Whilst the market has remained strong for fine and luxury goods, the cost and pace of that restructuring could not be supported by the company indefinitely.

"Given the long-established reputation the company has built for fine craftsmanship it is not surprising that we are already in receipt of a number of expressions of interest."

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