The collapse of fashion brand Orla Kiely was sparked by the retailer’s attempt to expand in the US, according to the latest administrators report.
Kiely Rowan, the parent company of the clothes and homeware designer, collapsed into liquidation in September last year.
Read more: Orla Kiely shuts up shop
A progress update by administrators Quantama revealed that the opening of a New York flagship store in 2011 eventually led to the demise of the fashion brand.
The opening created a “drain on cash flow, causing the requirement for additional borrowing, which eventually led to the collapse of the whole group”.
“Investigations into this matter and the actions of the directors in funding the US project to the detriment of the remainder of the group is currently ongoing,” the report said.
The report also revealed that Metro Bank had taken a £2.15m hit following the company’s collapse.
“It is not anticipated that the secured creditor [Metro Bank] will be paid in full,” the administrators said.
Preferential claims relating to unpaid holiday pay and wage arrears were estimated at £97,412, and to date 38 claims from former employees have been made, totalling £41,398.
The home and design licensing arm of the Kiely Rowan business was unaffected by the liquidation and products continue to be sold through distribution partners.
Main image credit: Getty