KPMG Appointed Administrators to Dawson International PLC
Blair Nimmo and Gary Fraser of KPMG LLP have started winding up Dawson International PLC and its UK subsidiaries, Dawson International Holdings (UK) Limited and Dawson International Trading Limited on 15 August 2012 following the lodging of notices of appointment of administrators at the Court of Session by the companies’ directors.
The Directors of Dawson International PLC had been in negotiations with the Pension Protection Fund (PPF) and the Pensions Regulator (tPR) to seek a negotiated entry of its UK defined benefit pension plans into the PPF.
This would have meant the PPF assuming responsibility for the Plans in return for a cash payment, loan note and equity stake. These negotiations proved unsuccessful according to KPMG.
Following rejection of the proposals, the Pension Scheme Trustees served notices on Dawson International Trading Limited and Dawson International PLC requesting payment of the Section 75 debt of £129 million by 19 August 2012, which the companies could not afford to meet. The directors therefore concluded that they had no alternative but to appoint administrators.
Dawson International PLC is one of the world’s leading cashmere businesses. Its main trading subsidiaries comprise two businesses based in the UK and the USA. The UK business comprises the Barrie knitwear business, based in Hawick in the Scottish Borders. Barrie manufactures highest quality cashmere garments at its factory in the Scottish Borders and sells to some of the world’s most prestigious couture houses, department stores and private label retail outlets.
Barrie has continued to thrive on the development of its export business and its luxury knitwear can be found in the most prestigious stores around the world from Japan and Korea to the United States of America and particularly in Continental Europe.
The US business comprises the Dawson Forte cashmere business based in Boston, Massachusetts. Forte sources garments form China for US private label programmes and its own branded cashmere collection ‘Kinross’. The US business is not in administration and continues to trade under the control of its directors.
The Joint Administrators are continuing to trade the Barrie business, whilst they seek a buyer of the business and assets as a going concern.
The underlying Barrie business has been trading profitably. In the year ended 31 March 2012, Barrie turned over £9.7 million (approximately 90% export sales) and generated a pre-tax profit of £1.1 million. Barrie has a loyal, highly skilled and committed workforce totalling 180 employees.
Blair Nimmo, Joint Administrator, commented that the administration represents an excellent opportunity to acquire a well known and profitable Scottish cashmere knitwear business with over 100 years of trading history, a portfolio of recognised brand names, including Barrie, Glenmac, John Laing and Kinross, and a worldwide customer base. Any parties with an interest in acquiring the business are invited to contact the Joint Administrators as soon as possible.