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
The criticism that pre-packs attract simply ignores this very
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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