(qlmbusinessnews.com Wed, 27th Sept, 2023) London, UK —
UK Branch of Ethical Fashion Pioneer People Tree Goes Bust with £8.5m Debt
The renowned ethical fashion brand People Tree has announced the liquidation of its UK business, which is saddled with over £8.5 million in debt. The company, founded by Safia and James Minney, gained fame for its commitment to organic materials and advocating for fair treatment of garment workers worldwide. Despite collaborations with designers like Vivienne Westwood and Orla Kiely, and endorsements from celebrities such as Emma Watson and Jo Wood, a decline in trading performance has forced the UK branch into liquidation.
The majority of UK-based workers have already been made redundant, and creditors, including UK suppliers and customers, have been informed about the impending liquidation. A meeting on 28 September will officially dissolve the company, appointing liquidators from Opus Restructuring & Insolvency to oversee the process.
While People Tree's European and Japanese arms will continue trading, the future of the brand remains uncertain. The European website still operates, with a promise of resumed shipping to the UK, but reports suggest that its sole European employee is also facing redundancy.
Safia Minney, who stepped back from day-to-day operations in 2015, expressed her sadness and empathy for the producers, investors, and customers who have been affected by the liquidation. James Minney, the company's CEO, expressed his deep regret over the situation but reaffirmed the brand's commitment to fair trade and sustainability.
Major Indian suppliers are among those significantly affected, with debts ranging from £100,000 to over £400,000. Some suppliers have only received partial payments for this year's autumn collection.
The liquidation has left former UK staff in financial turmoil, with many reporting unpaid salaries since July. Some former employees have resorted to legal action to claim their dues.
This unfortunate turn of events marks the end of an era for People Tree in the UK, where the company had made significant strides in ethical fashion. People Tree was a pioneering force, demonstrating that a better and more sustainable way of conducting business was possible within the fashion industry.
As staff had continued to work tirelessly, even in challenging times, they held onto hope, aiming to turn things around and ensure that suppliers were duly compensated. People Tree embodied a radical idea – to prove that ethical trade could set a higher standard in the fashion world.
Documents relating to the liquidation, reviewed by reporters, reveal that the company's 14 remaining staff are collectively owed just over £243,000. On average, each staff member is owed approximately £17,000. Some customers have been awaiting refunds since June.
The impact of the company's closure is not limited to its employees and suppliers; it also affects the Minney family. Safia Minney, though no longer directly involved in daily operations since 2015, remains a shareholder and was a non-executive board member until July this year. Her husband, James Minney, has been steering the company since her departure.
The largest share of the debt, approximately £1.6 million, is owed to three key creditors. Shared Interest and Oikocredit, the investors, are jointly owed £816,893. Their loans are secured by personal guarantees from James and Safia Minney.
This turn of events reflects the challenging environment for ethical businesses in today's economic landscape, highlighting the difficulties faced by companies dedicated to sustainability and fair trade.
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