Ethel Austin Limited and Au Naturale Limited in Administration

Ethel Austin Limited and Au Naturale Limited (Both In Administration) ("the Companies")

Updated: 8 February 2010

Introduction and overview

Geoffrey Bouchier, David Whitehouse and Philip Duffy of MCR were appointed as joint administrators ("Administrators") of the Companies on 8 February 2010. All Administrators are licensed by the Insolvency Practitioners' Association.

The affairs, business and property of the Companies are being managed by the Administrators, who act as agents of the Companies and without personal liability. The role of the Administrator is to deal with the business and assets of the insolvent estates, not to replace the Directors of the Companies. The Administrators are not accountable for the management of the business prior to their appointment.

Since their appointment, the Administrators have commenced marketing for a sale of all or part of the Companies’ business and assets as a going concern.

The Administrators will continue to deal with the assets of the Companies in order to raise funds to distribute to creditors in the prescribed order of priority as set out in the Insolvency Act 1986 ("IA86").

Broadly, the order of priority is as follows:

(1) - Preferential Creditors (certain categories of employee claims)

(2) - Prescribed Part distribution to Unsecured Creditors (includes customers, suppliers and residual employee claims) this is capped at Ł600,000 in accordance with the IA86 to share equally between ALL unsecured creditors.

(3) - The Secured Lenders (who have registered charges over the Company or its assets)

(4) - Unsecured Creditors (includes customers, suppliers and residual employee claims)

GIFT CARDS

The general position when a company goes in Administration is that customers would no longer be able to redeem any form of gift cards or vouchers purchased prior to the date of Administration, and would rank as an unsecured claim against the company (ie. a pre Administration claim).

The Joint Administrators have on this occasion however, decided to permit Ethel Austin and Au Naturale Gift Cards to be redeemed on the strict basis as set out below.

These specific Gift Cards will continue to be honoured within the respective Companies’ stores on the sole condition that they can only be used to fund up to 50% of any transaction.

For example; to redeem a Ł10 Ethel Austin Gift Card, the customer will be required to purchase items to the value of Ł20 or greater. (Payment would then be Ł10 Ethel Austin Gift Card and Ł10 cash/credit or debit card).

Customers please note, that store employees are not authorised to vary this policy. Please therefore respect their position and refrain from challenging them in relation to this matter.

For the avoidance of doubt this promotion will remain unchanged for the duration of the Adminstrators’ trading period.

Any customer not wishing to take up this offer will therefore rank as an unsecured creditor in the Administration.

CUSTOMERS WHO HAVE PAID IN FULL AND ARE YET TO RECEIVE GOODS

CREDIT CARD AND VISA DEBIT CARD PAYMENTS

Customers should contact their credit card issuer who may be able to initiate a charge-back for their order. Please note the timing, quantum and appropriateness of charge-backs by the credit card issuers is beyond the control of the Administrators and no assistance can be provided in this regard.

CASH, CHEQUE, NON-VISA DEBIT CARD PAYMENTS

These claims are classed as non-preferential unsecured claims against the Companies.

RETURNED GOODS

GOODS PURCHASED BEFORE 8 FEBRUARY 2010

Customers who purchased goods prior to 8 February 2010 who wish to return them will be permitted to exchange the goods for items of the same value or less upon producing a receipt less than 28 days old in line with the original returns policy. No credit can be provided if the return is for goods of a lower value.

Unfortunately cash or card refunds cannot be provided.

If you do not wish to exchange goods then you may have an unsecured claim in the Administration.

GOODS PURCHASED ON 8 FEBRUARY 2010 OR AFTER

Customers who purchase goods from 8 February 2010 will be permitted to exchange those goods for items of the same value or less upon producing the receipt within 28 days of purchase. Your statutory rights remain unaffected.

EMPLOYEES

Employee should direct questions through the usual channel. The Human Resources department should be contacted in the first instance at the Companies’ Head Office.

SUPPLIERS

Goods or services supplied to the Companies’ subsequent to the Administrators’ appointment must only be made against orders which have been authorised in writing by the Administrators and their staff.

Please note that the Administrators are not adopting any contracts entered into by the Companies prior to their appointment.

All trade accounts with the Companies should be closed with effect from the close of business on 8 February 2010. I would request that you send a statement of your final account direct to the Companies’ trading address in order that your claim against the Companies can be noted. You will appreciate that no payment can be made to creditors of the Companies in respect of debts arising prior to our appointment.

RETENTION OF TITLE (“ROT”)

Any creditor who believes they are entitled to make a ROT claim should forward full details of their claim to ethelaustin@mcr.uk.com or aunaturale@mcr.uk.com under the heading ‘ROT’.

Suppliers will not be permitted to enter the Companies’ premises without first having made an appointment with the Administrators’ representatives.

ADDITIONAL INFORMATION

Please note the Administrators are unable to provide customers or trade suppliers with any other information other than the information contained in this update.

The Administrators will not be responding individually to customers and trade suppliers.