The directors of a leading shop chain will keep their jobs despite shedding hundreds of thousands of pounds of debt and laying off staff.
Clone Zone Ltd went into administration last month, owing up to £500,000, according to insider estimates.
But Libertybelle UK Ltd, the outfit which has now bought Clone Zone, lists as its directors Michael McCann and David Edwards – the same people who used to own Clone Zone Ltd.
This means that, due to a legal loophole, McCann and Edwards have been able to stay in their posts, leaving employees and creditors shafted to the tune of half a million pounds.
They have even set up a new company, before they called in the administrators, called Clone Zone UK Ltd – so to those not in the know it could look like it is all just business as usual. And all this is perfectly legal.
Subsequently, as their staff and suppliers lose money during the country’s worst economic period in recent history, both McCann and Edwards will carry on regardless.
In the past month, the pair made up to 25 employees redundant – roughly half of their workforce – with little or no notice.
During this time, they also closed six UK stores: Bournemouth, Brighton, Bristol, Glasgow, Leeds and Newcastle. These branches have now been taken over by Nice n’ Naughty, a straight sex shop chain.
McCann – a former chair of the Gay Business Assocation and the Adult Industry Trade Association – and Edwards, were listed as the directors of Libertybelle UK on 24 December 2008, several weeks before Clone Zone filed for administration.
Part of their insolvency agreement involved offering the sale of the company to its corporate peers, yet – surprisingly – Millivres Prowler Group, one of the industry’s leading queer brands, were never approached with a formal opportunity to purchase the group.
DW Partners, the company managing Clone Zone’s insolvency, failed to comment.
MPG, one of Clone Zone’s main suppliers, who also own GT, Diva, AXM and Pink Paper, plus the nationwide Prowler stores, is currently owed a substantial amount by the firm and has requested the return of unpaid stock, which Clone Zone still possess.