Retail therapy: the downside
Suppliers fume over Stuttafords rescue deal
The retailer’s rescue plan could hit smaller creditors hard, while main banker Nedbank will get most of its money back
A contentious “rescue plan” to save 159-year-old retailer Stuttafords goes to a vote next Monday in what promises to be a hot-tempered meeting. Stuttafords hit a wall last year and was put into “business rescue” in October, owing a sizeable R836m to hundreds of creditors, including R147m to Nedbank. The list of creditors obtained by the Financial Mail reveals that some big brands stand to lose plenty. For example, the company owes Adidas R1.34m, Estée Lauder R53.8m, Levi Strauss R2.1m, L’Oréal SA R13.5m, Puma R2.1m and Tommy Hilfiger R14.6m. Now, a new rescue plan proposes that these small suppliers (“concurrent creditors” whose debt wasn’t secured) will only get an immediate 5c for every R1 they are owed. Then, over the next year and a half, they will get another 18c for every R1 due to them. Critics say that, for small suppliers already on the breadline, writing off more than 77% of what they’re owed by Stuttafords could cause them to go bust. Gareth Cremen, a lawyer from Hogan Lo...
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