BusinessBusiness RecoveryKingston Smith liquidators called to Lily Allen-founded business

Kingston Smith liquidators called to Lily Allen-founded business

Lucy in Disguise enters liquidation with £845,000 debts

KINGSTON SMITH liquidators have been appointed to women’s clothing retailer Lucy in Disguise, originally co-founded by singer Lily Allen.

Ian Defty and James Dowers, both from Kingston Smith, were appointed joint liquidators to the LLP.

Pop star Lilly Allen and her sister Sarah Owen founded the business in 2009 with Allen stepping down in July 2011 following the birth of her second child. Allen’s mother stepped in as director.

According to the liquidators, the business collapsed owing about £845,000 to its creditors. An administrator statement said that accounts filed in February 2012 showed that the business was insolvent by the trading period that ended 30 November 2010.

Dowers said: “Many retailers are failing due to the current economic climate, but when a business goes into liquidation owing such a large amount of money, it always raises creditors’ concerns.

“We will be working closely with the directors of the business and its creditors to ascertain the reasons behind such a large failure.”

The business originally began life as a way for customers to rent high fashion vintage clothing, later moving onto selling dresses. It was the focus of a Channel 4 documentary series called riches to rags which charted the pair’s preparations to open their store, mentored by Mary Portas. It continues to have one store in Soho. 

Unlike an administration liquidators have the power to investigate the books of the business and are not limited by a 12 month time-frame. They can also seek legal action against any entity or person that is liable for funds to pay creditors.

Creditor Aurora Fashions was granted a compulsory winding up order against the company at a high court earlier this year, for outstanding debts of £100,000, although most of that has now been paid, the Mail on Sunday reports.

Richard Glanville, Aurora’s chief financial officer, told the publication his company was still owed £12,000 and said it had been impossible to settle the matter without taking legal action. The original bill of £100,000 was only paid ‘in dribs and drabs’ over 18 months.

“We had to make numerous phone calls and send several letters to chase up payments,” said Mr Glanville. “It has been a very drawn-out affair and we gave them every opportunity to pay the money back before applying to put it into administration,” he said.

Aurora bought collapsed fashion retailer Mosaic Fashions through a pre-pack administration in 2009. The assets in Mosaic included the clothing brands and stores of Warehouse, Oasis, Coast and Karen Millen, as well as the overseas shares of Karen Millen.

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