AllSaints urgently needs £100m

The youth fashion chain AllSaints, founded by Kevin Stanford, is in urgent talks with potential investors to raise an emergency budget that would allow the London based retailer to secure its long term future. In the year to January 2010, sales rose by 46%

to £132.9m.

Liquidators to two collapsed Icelandic banks have put their stakes in the British clothing chain AllSaints—which made its U.S. début last year—up for sale, the Telegraph reported earlier in March.

Though the majority of the retailer's stock is owned by entrepreneur/Karen Millen co-founder Kevin Stanford, who reportedly plans to hold on to his investment, Kaupthing and Glitnir liquidators have hired Ernst & Young to seek out new buyers. The deal puts the edgy East London-chic brand at an estimated £140 million value (around $227 million). "[The Icelandic banks] are looking to exit and realize a return on their investment," AllSaints said.

Just one week after the seek for potential investors started, Sky TV City Editor Mark Kleinman just revealed that AllSaints crew is urgently looking for £100m to secure its immediate future.

According to Kleinman, Ernst & Young, the accountancy firm working on behalf of the liquidators of Kaupthing and Glitnir, another Icelandic bank, has asked potential investors to submit proposals to buy a stake in the company by the end
of this week. Given that the process of recruiting a new shareholder only began last month, the tight timetable
underlines the urgency with which the banks are seeking the
fresh capital.

Assessments of the amount of money required to secure AllSaints’ viability vary, but one person involved in the process told me that it was likely to be between £50m and £100m. Reports last month suggested that E&Y was undertaking a rather benign conventional sale process.

Among the parties reportedly approached by E&Y to invest in AllSaints were the private equity firms Change Capital Partners, Towerbrook Capital Partners and Oaktree Capital. The auditors might find another option ever quicker, as the company should build up this emergency capital injection of up to £100m by the end of this week to secure its long term future. Many
commentators say the retailer, which has more
than 60 shops in the UK, has expanded too
quickly into a difficult and competitive market.