The sudden plunge into bankruptcy of the Bodywear Office (tBO) was triggered when its biggest financial backer, a China-based company that had been manufacturing lingerie for the group, withdrew an offer of funding.
The company was declared bankrupt by the district court of Rotterdam, The Netherlands, on February 19 this year, but its financial troubles date back more than a year, according to documents sent to Lingerie Insight by Houthoff Buruma, a law firm that is acting on behalf of Dutch authorities.
Madame SuperTrash, Jenny Packham Intimates and Hackett underwear were all manufactured and distributed by tBO, and the company is believed to have gone bust while holding considerable stock levels for the brands.
The initial findings by Houthoff Buruma describe how, in mid-2013, tBO’s board decided it needed to raise new capital to fund planned growth of the business.
China Honey Lady Brands Ltd (CHLB), a Chinese company which had been manufacturing products for tBO, agreed to make a “considerable investment” in return for a majority stake in the company.
By the middle of last year, the report continues, a difference of opinion developed between tBO and CHLB. “The consequence of this was that the money pledged was not forthcoming, which put the liquidity of tBO under severe pressure,” it states.
As a result the supply chain from China to tBO’s clients in Europe broke down catastrophically. “The income of tBO fell sharply in the months before the bankruptcy because lingerie ordered by clients could not be delivered, or could not be delivered in a timely fashion, by tBO. As a result, the company didn’t get paid,” Houthoff Buruma reports.
The executive team at tBO attempted to find alternative financing to keep the business afloat, but all efforts failed and it ran out of cash.
A last minute stay of execution was granted on February 13, when tBO was granted protection from its creditors, but the company was declared bankrupt less than a week later.
All shares of The Bodywear Office Global, based in Hong Kong, are listed as being held by Vertigo Hong Kong Ltd, whose shares are held (indirectly) by two directors Mr OP Wagenaar and Mrs A. van der Zande; Micon Beheer BV, the main financer of tBO; and China Honey Lady Brands Ltd (CHLB), a business run by a Chinese investor.
The law firm stresses that the financial details in the report are "the subject of further investigations" and cautions that some details may not be complete or accurate. A further report is expected within three months.