All Saints set to secure lifeline deal with Goode

Fashion chain All Saints expects to complete a deal within the next week that will secure its long-term future, its chief executive said yesterday.

A consortium led by American firm Goode Partners is in talks to buy a majority stake currently owned by two failed Icelandic banks.

If the deal comes off, the partnership is expected to ease some of the financial pressure on the business, which employs about 2,000 staff, by paying off part of its 53 million debt pile, including money owed to lender Lloyds Banking Group.

Chief executive Stephen Craig denied press reports that the buy-out consortium is in jeopardy.

He confirmed that one of its members had walked away, but said there were other parties interested in taking its place.

"Lloyds remain supportive of us and I believe the transaction will complete within the next seven days," he said. "That would bring new cash into the business and allow us to grow."

A spokeswoman for Lloyds told The Scotsman: "Talks with interested parties are ongoing."

It is understood that the bank is unlikely to place All Saints into administration - contrary to reports - as no deadline has been put on funding negotiations.

All Saints - which has 63 stores and 47 concessions, including shops in Aberdeen, Edinburgh and Glasgow - is best-known for decorating its stores with Singer sewing machines. As well as the UK, the firm operates in mainland Europe, Russia and the United States.

The chain recently moved its Glasgow store into a prominent location on the city's Buchanan Street, which had been vacated by defunct bookseller Borders.

All Saints was effectively put up for sale after nationalised Icelandic banks Kaupthing and Glitnir decided to sell their stakes to realise some of their assets.

The banks came to own a majority stake in the business after the collapse of its previous owner, Baugur, an Icelandic investment group.

In its heyday, Baugur owned much of the UK high street, including stakes in House of Fraser, frozen food chain Iceland and Karen Millen-owner Aurora.

Baugur was an important business partner for Scottish retail tycoon Sir Tom Hunter.

It is understood that Kevin Stanford, the retail magnate who co-founded the Karen Millen chain with his ex-wife of the same name, also owns a significant stake in All Saints.Investment group M1 - which was co-founded in the 1960s by Najib Mikati, Lebanon's prime minister designate - last month confirmed that it had pulled out of the consortium.

Accounts filed at Companies House showed that turnover at All Saints jumped by 46.2 per cent to 132.9m in the year to 31 January, 2010, the last period for which figures were available.

The rise in sales also filtered through to an increase in pre-tax profits, which leapt from 4.5m to 10.7m.The results marked a turnaround for the company, which had been hit by collapse of its Icelandic bankers in 2008.

Kaupthing and Glitnir were unable to provide letters of credit to the company's suppliers in China and India, promoting credit insurers withdrawing their support.

This resulted in "severe working capital hurdles" and forced All Saints to switch banks in July 2009 to Lloyds TSB, which initially provided 30m of lending and a further 16m after the company's 2010 year end.

The 2009-10 accounts showed that All Saints had net debt of 28.4m as at 31 January, 2010, although this figure has reportedly now risen to 53m.

Figures published on Thursday highlighted a challenging outlook for the high street, with data from the Office for National Statistics showing that retail sales volumes grew just 0.3 per cent in the past three months.