Claire’s Accessories administrators hand creditors nearly £10m bill
The administrators of collapsed jewellery retailer Claire’s Accessories have billed nearly £10m for their work, with bosses charging more than £1,500 per hour.
The retail chain collapsed for the second time in January, just months after private equity firm Modella Capital bought it out of administration last September.
The double collapse of Claire’s looks set to hand two of the City’s top consultancy firms a blockbuster payday, as administrators bemoaned a “significantly higher volume of work” than expected.
Interpath, the administrators for the original collapse of Claire’s Accessories, had initially charged creditors about £4m for their work.
But following the retailer’s second collapse, Interpath said it had asked creditors to grant the consultancy an additional £3.2m for the extra work, bringing their total bill to more than £7.2m.
The consultancy said they had to continue trading the business for 15 weeks following its collapse, overseeing more than 2,000 employees across about 300 shops.
“As a result, a larger and more senior administration team was maintained for a longer period than originally anticipated,” Interpath said.
“Further time costs are also expected to be incurred as a result of the extension of the administration period, which has been necessary to manage the orderly run-off of the Company’s property portfolio.”
Bosses charge £1.5k per hour
Will Wright, Interpath’s UK chief executive, and Chris Pole, the head of its Midlands and South team, had been billing creditors an hourly rate of £1,410 for their work, but hiked this to £1,515 from April.
Across Interpath’s team, administrators charged an average rate of £909 per hour, totalling time costs of more than £1m.
Interpath’s bill comes on top of the costs incurred by the administrators of Cauki Ltd, the company set up by Modella to complete its purchase of Claire’s.
New York-headquartered consultancy Kroll has been overseeing this administration and has logged time costs of about £2.2m at an average rate of £510 per hour.
This could take the total costs of Claire’s Accessories’ administration to more than £7.4m, though the retailer’s creditors are yet to approve these pay deals.
Modella has snapped up a number of struggling retailers in recent years. Last year, it bought WH Smith’s 480 high street stores for £40m, before renaming them TG Jones.
The newly-named stores have faced difficult trading since their change of ownership. Modella recently pushed through a drastic restructuring which could force the closure of 150 sites.