Clerys sale takes toll as Best chain applies for examiner
An interim examiner has been appointed to a company operating 13 Best Menswear stores across Ireland and two other fashion stores employing some 130 people.
The sudden closure of Clerys last month had a "catastrophic" effect on the cash flow of the company, Best, as it was a concession holder operating its largest store from the Dublin department store, the court heard.
The damage occurred as a result of the loss of some €270,000 held by Clerys in trust for Best arising from prior sales and the loss of trading revenues since Clerys closed, said Rossa Fanning BL, for the company.
Some €500,000 stock was also locked into the Clerys building and could not be sold, he said.
While the company got access to the stock a week after the Clerys closure, it remained unable to use its largest store and would suffer significantly from loss of future cash flow from there, he said.
Best, established in 1948 and with registered offices in Finglas, Dublin, has suffered in recent years due to the economic downturn.
It is currently unable to service its bank debt. But an independent expert, accountant Michael McAteer of Grant Thornton, believes it has a reasonable prospect of survival once certain conditions are met, counsel said.
Those conditions included a restructuring of the company and renegotiation or possible repudiation of leases, he said.
Ms Justice Caroline Costello said she was satisfied to grant court protection to the company.
She appointed Declan McDonald of Price WaterhouseCooper as interim examiner pending the hearing of the petition for examinership on July 30.
The company's main creditor is Allied Irish Banks, owed some €12.6m, while trade creditors are owed almost €12m, the court heard.
AIB was on notice of the petition and the bank hoped examinership might assist in achieving an effective restructuring of the company, the court was told.
Best is part of a wider group of related stores employing almost 200 people in 19 stores, including several concession stores operated by other parties in Ireland and the UK, the judge heard.
Those companies are not affected by Best's application.