Crabtree & Evelyn to restructure following bankruptcy

By Simon Pitman

- Last updated on GMT

Related tags: Kuala lumpur

Crabtree & Evelyn has announced that its US business will emerge from bankruptcy, at the end of January, resuming with a re-organized structure.

The company says that, although it became one of thousands of businesses to file for bankruptcy at the height of the economic downturn last year, it has proved to be one of just a handful that has re-emerged for business.

The restructuring plan centers on a $26.3m loan from its parent company Kuala Lumpur Kepong Berhad, which will allow it to pay off outstanding debts, leaving enough funds to implement its new restructuring plan.

Many of the main objectives of the restructuring plan have already been implemented, and as a result the company’s operations in the US are expected to emerge as a leaner and more efficient business.

Reducing US retail outlets and focusing online

One of the most significant moves has been to reduce the number of retail outlets its products are present in by approximately 35 in an effort to concentrate the marketing and promotion of its product portfolio in the remaining 91 retail locations.

The company has also re-launched a new and more comprehensive e-commerce platform, from which it hopes to tap into the growing spend in online purchases, as well as launching a new line of natural-based hand creams and cleansers - Citron Honey & Coriander Hand Therapy Collection.

The company announced that it was filing for chapter 11 of the US bankruptcy code back in July last year, underlining the fact that other affiliates, including operations in the European Union, Hong Kong, Malaysia, Singapore and Australia, were not filing for protection of this kind.

To maintain the business and its cash flow during the filing the company secured a commitment for a debtor-in-possession financing facility which enabled it to stay afloat during the chapter 11 process. This has seen the company trading as normal, with its products still available in stores and online.

Focus on a smaller footprint

“The bankruptcy process has allowed us to focus on a smaller footprint of retail stores, making each one of them a distinctive experience for our customers," said​ Stephen Bestwick, the company’s acting President.

Crabtree & Evelyn says it expects to make a loss of approximately $13m on a turnover of $100m during the current fiscal year, which compares to a loss of $8m on a turnover of $107.5m during the last fiscal year.

The brand was launched in the UK over 30 years ago and is currently owned by Malaysian investment firm Kuala Lumpur Kepong Berhad. It specializes in natural-based skin care and soap products that are now sold worldwide.

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