A group of suppliers owed millions of pounds by the collapsed fashion retailer Jaeger is considering taking legal action against its former owners.

The companies, which include the Portuguese clothing supplier Calvelex, had tried to mount a rescue bid after Jaeger entered administration last month but found they could not buy the business because the rights to use the name had been sold to a mystery buyer.

“We were very disappointed with this situation and question the thinking behind selling the intellectual property of the Jaeger brand name before the company went into administration since without it the value to potential bidders would be greatly reduced,” said the Calvelex boss, César Araújo, who is leading the consortium.

Araújo said the group was considering other options, including the possibility of “court action to examine the actions of the company directors and the former owners of Jaeger”.

Jaeger, which employed almost 700 people, collapsed into administration last month. So far administrators have closed 20 of its 46 stores, making more than 200 staff redundant.

Fashion retailers are facing tough trading conditions as Britons stay away from the high street. Several thousand retail jobs are at risk as Store Twenty One, the value fashion chain, and the owner of clothing brands Jacques Vert, Windsmoor and Eastex face a financial crunch.

Jaeger was owned by Jon Moulton’s private equity firm Better Capital for five years. In its heyday, Jaeger dressed Audrey Hepburn and Marilyn Monroe but more recently it had struggled to turn a profit on a competitive high street. After spending several years trying to revive the retailer’s fortunes, Better Capital hoisted a for sale sign at the start of this year.

A buyer failed to emerge and, at the end of March, Better Capital sold Jaeger’s debt for £7m to a buyer who has been named in reports as Edinburgh Woollen Mill owner, Philip Day, who bought Austin Reed out of administration last year. However, the identity of the buyer has not been officially confirmed.

Ten days later the administrators were called in. The owner of Jaeger’s debts is a secured creditor so ranks ahead of other parties, such as suppliers and landlords, in the queue to be repaid from the proceeds of the administration.

Last year, Jaeger’s sales fell from £84.2m to £78.4m and it made a £5.4m pre-tax loss, according to accounts filed at Companies House. In the accounts, which were signed off on 13 July 2016, the directors said Better Capital had provided an undertaking to provide financial support for at least another 12 months from that date.



Asked about the threat of legal action, Moulton told the Guardian that Better Capital had gone to great lengths to find a buyer for Jaeger. “Extensive efforts were made to find a buyer and buyers certainly had a chance to bid in any format,” he said. “The transaction was effectively to sell control of Jaeger, including its brand, and was done without insolvency. Any insolvency actions lie with the [Better Capital] fund’s successor.”

Araújo is also calling on the government to review the protection offered by insolvency laws as, after a string of retailer collapses, it was becoming increasingly difficult for international suppliers to do business in the UK.

“A sale of secured debt should have to be disclosed to the creditors generally,” he said. “Many suppliers believe that it is high time the British government urgently undertake a review of the laws relating to UK insolvency to provide a more ethical, moral and level playing field that gives all creditors access to information and the opportunity to have input into the future of companies in administration.”