People Tree liquidates UK business, owing creditors £8.5m

People Tree is reportedly set to put its UK business into liquidation, owing debts of more than £8.5m to creditors, The Guardian has reported. The debts include money owed to suppliers, customers and the majority of its British workforce. Following a deterioration in its trading performance, the sustainable fashion brand reportedly warned creditors that it cannot meet these debts, leaving suppliers in India out of pocket by “hundreds of thousands of pounds”. According to The Guardian, creditors have now received a letter saying that the company will be dissolved today (28 September), with Opus Restructuring and Insolvency set to be appointed as liquidators. At present, the brand continues to trade in Europe and Japan, but The Guardian said its future in the UK and Europe is “at risk”. While its European website continues to operate, insiders said the European operation’s only employee was being made redundant and it was “not clear how trade would be able to continue as the buying and marketing had been run from the UK”. The Guardian added that most of the group’s former UK staff have not been paid since “at least” July, though many were not made redundant until mid-August, and have still not received the money owed. Documents seen by The Guardian reportedly show that 14 members of staff are together owed just over £243,000, or an average of £17,000 each. It is also understood that some shoppers have been waiting for refunds since June. In addition, the company reportedly owes almost £1.6m to three creditors. Shared Interest and Oikocredit, which are together owed £816,893, have their loans secured by personal guarantees by founders James and Safia Minney. Safia Minney said she was “heartbroken” about the move, adding she was “sorry for the producers who depended on the business for their livelihoods, investors and customers who have been let down”. James Minney, current CEO of People Tree in the UK and Japan, added: “I am extremely sad at this situation. Our customers and our wholesale stockists have been and always will be the absolute rock of support for People Tree. Our suppliers and creditors, with whom we have been in close discussions throughout this difficult time, have been supportive throughout our journey. “The basic mission of fair trade, whether fashion or other goods, of honouring people’s traditions, hand skills, and the love they pour into the products, and creating sustainable market access, was and is paramount, even though we cannot continue our business in the UK.” People Tree has been contacted for comment.