The UK business of ethical fashion brand People Tree is believed to have fallen into liquidation after accumulating debts of over 8.5 million pounds in light of deteriorating trading conditions.
It is understood that the company’s creditors have received warnings that it could not meet the debts, with a meeting now expected to be held September 28 regarding plans to dissolve the company.
Its position has also resulted in Indian suppliers being left out of pocket, according to The Guardian, which had initially reported the news, with several big firms in the region reportedly owed more than 100,000 pounds.
In a statement to the media outlet, James Minney, the chief executive of People Tree in the UK and Japan, said: “I am extremely sad at this situation. Our customers and our wholesale stockists have been and always will be the absolute rock of support for People Tree.
“Our suppliers and creditors, with whom we have been in close discussions throughout this difficult time, have been supportive throughout our journey.
“The basic mission of fair trade, whether fashion or other goods, of honouring people’s traditions, hand skills, and the love they pour into the products, and creating sustainable market access, was and is paramount, even though we cannot continue our business in the UK.”
Staff owed 243,ooo pounds, liquidators to wind up business
Minnet added that the group was in “ongoing discussion” with suppliers as it attempted to turn the business around.
While the company’s European website continues to operate, alongside a note that states shipping to the UK would begin soon, sources for The Guardian claimed that the European operation’s only employee was being made redundant following a series of redundancies at its UK headquarters.
Documents linked to the liquidation seen by the newspaper further stated that the group’s 14 employees are owed a combined 243,000 pounds.
The upcoming meeting is expected to see Opus Restructuring & Insolvency to be appointed as liquidators to wind up the business, with its future in the UK and Europe understood to be at risk.
People Tree isn’t the first to have been hit by falling sales in the UK. The region has seen a number of companies forced into liquidation or administration amid its ongoing cost-of-living crisis, from high street regulars like Wilko to luxury fashion brands like Julien MacDonald.