People Tree liquidates owing creditors £8.5m
“Ethical fashion brand, People Tree, has plunged into liquidation in the UK, leaving behind a trail of debts amounting to a staggering £8.5 million. This unfortunate turn of events comes as a result of deteriorating trading conditions, leaving UK suppliers, customers, and staff grappling with financial losses.
People Tree, originally established in Japan in 1991 by the former couple Safia and James Minne, expanded its operations to the UK in 2000, quickly establishing itself as a prominent player in the British fashion industry. The brand was renowned for its commitment to using organic materials and advocating for improved working conditions for garment workers worldwide.
However, the company recently found itself in dire straits, prompting a warning to creditors about its inability to meet its financial obligations. As a result, a meeting has been scheduled for September 28 to discuss the dissolution of the UK branch. Opus Restructuring & Insolvency is poised to oversee the liquidation process.
In a bid to weather the storm, People Tree’s European website continues to function, assuring customers that shipping to the UK will resume shortly.
Despite stepping down from her role in 2015, Safia Minney expressed her remorse, stating, “I’m sorry for the producers who depended on the business for their livelihoods, investors, and customers who have been let down.”
James Minney, the Chief Executive of People Tree in the UK and Japan, added, “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.”
The financial turmoil has also cast a shadow on the brand’s suppliers in India, who are reportedly owed over £100,000, as disclosed in the letter to creditors. Meanwhile, former UK staff members of People Tree, many of whom were not made redundant until mid-August, claim they have not received the money owed to them, with some stating their dissatisfaction with the ethical company’s inability to settle its obligations.
Documents associated with the liquidation, as reported by The Guardian, reveal that the company’s 14 employees are collectively owed just over £243,000, translating to an average of approximately £17,000 per person. To compound matters, some customers have been awaiting refunds since June.
The dire financial situation has led to the UK arm of People Tree facing liquidation, with debts exceeding £8.5 million, due to challenging trading conditions. Creditors have been alerted to the company’s inability to meet its obligations, prompting a meeting scheduled for September 28 to discuss the dissolution of the UK branch.
Notably, People Tree is not the sole casualty of the UK’s ongoing cost-of-living crisis, which has triggered several businesses, both on the high street and in luxury fashion, to face liquidation or administration, including well-known brands like Wilko and Julien MacDonald.”
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