The pre-pack acquisition of Agent Provocateur by Mike Ashley was almost designed to provoke a reaction and excited comment. Pre-packs divide opinion as much as Brexit, and it won't have escaped anyone's notice either that Mr Ashley's name is frequently in the news.
The former owner of Agent Provocateur is quoted as saying the deal was "a disgrace to British business". This is another in a long line of quotes that fundamentally misunderstand the cause and effect of a pre-pack.
The pre-pack itself does not cause the loss to creditors. The loss to creditors arises because the company is insolvent and the pre-pack happens because of the insolvency. In most cases, if no pre‑pack sale is carried out, there will be no sale whatsoever and the loss to creditors is therefore even higher. Not all pre-packs are carried out in circumstances where there is no viable alternative, but very often, the fact that there is no viable alternative is a primary justification for a pre-pack.
The criticism that pre-packs attract simply ignores this very basic truth.
That is not to say that the circumstances leading up to the insolvency are not worthy of consideration. Of course they are, they always will be: but they will be worthy of examination whether or not a pre-pack is then carried out.
It is not difficult to see why the mix of lingerie, Mike Ashley and pre-packs would give rise to some lurid headlines and comment, but can we please not use that unusual mix to further bash pre-packs as a concept.
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