Suppliers, clients, and employees in the UK are among the creditors, but operations in Europe and Japan continue.
With debts totaling more than £8.5 million, including money owing to suppliers, customers, and the majority of its British workers, the ethical apparel company People Tree is declaring bankruptcy for its UK operations.
People Tree was started by the ex-couple Safia and James Minney, whose celebrity clientele included actress Emma Watson and model Jo Wood. It used organic materials and fought for better treatment of garment workers all around the world, becoming a significant voice in UK fashion.
However, due to a decline in commercial performance, it has informed creditors that it will be unable to pay its bills, costing Indian suppliers hundreds of thousands of pounds.
A letter to the company’s creditors said that a meeting would be convened on September 28 to dissolve the business, which had already laid off the bulk of its employees recently. At the meeting, liquidators from Opus Restructuring & Insolvency will be chosen to close the company.
People Tree, originally known as Global Village, was established in Tokyo in 1991. It then expanded to the UK and worked with designers such as Vivienne Westwood and Orla Kiely. Wood, the ex-wife of Rolling Stone Ronnie Wood, also visited the company’s producers in Bangladesh and Nepal.
Currently, the brand is still active in Europe and Japan, but its future in the UK and Europe is in jeopardy.
Former insiders claimed that although People Tree’s European website is still up and running and that shipping to the UK will soon start, the operation’s sole employee was being laid off, and it was unclear how trade would be able to continue since the buying and marketing were handled from the UK.
Safia Minney claimed she was “heartbroken” over the liquidation. Safia Minney withdrew from day-to-day activities in 2015. “I’m sorry for the producers who depended on the business for their livelihoods, investors, and customers who have been let down,” she continued. The remaining components of the company should “find a way through the current difficulties and flourish in the future,” she hoped.
The current chief executive of People Tree in the UK and Japan, James Minney, expressed his sadness at the circumstance. The absolute pillars of support for People Tree have always been and will continue to be our patrons and our wholesale stockists. Our suppliers and creditors, with whom we have had frequent conversations throughout this trying time, have been encouraging all along the way.
“Even though we can no longer operate our business in the UK, the fundamental mission of fair trade, whether fashion or other goods, of honoring people’s traditions, hand skills, and the love they put into the products, and creating sustainable market access, was and is paramount.”
The letter to creditors states that several significant Indian suppliers are owed more than £100,000, with one owed more than £400,000. According to one source, several people only received payment for around half of what was due for this year’s autumn collection. One vendor claimed his business was negatively impacted and that he was aware of other vendors who were “in distress.”
The group was “ongoing discussions with our suppliers as we tried to turn the business around,” according to James Minney.
The majority of the former UK employees of People Tree claim they haven’t received their unpaid wages since at least July, despite the fact that many of them weren’t laid off until mid-August.
After being laid off in the first few months of this year, at least two people are known to have taken the corporation to court to demand recompense. The ethical company had previously set “the gold standard” in ethical trade and had played a significant role in proving that the fashion industry could be conducted differently, thus one former employee called it “horrific” that it had been unable to pay suppliers.
“People Tree was a brilliant, avant-garde concept. It was there to demonstrate that there was a better way, she remarked. She proceeded by saying that even during difficult times, employees had stuck with the company in the hopes that things would improve and suppliers would be paid.
According to documents related to the liquidation obtained by the Guardian, the 14 employees of the firm together owe just over £243,000, or an average of £17,000 each. It is known that some customers have waited since June to receive reimbursements.
After being laid off in August and waiting weeks for People Tree to declare itself insolvent so that she could apply to the government-backed redundancy payments service, which facilitates assistance for those who lose their jobs when a company goes bankrupt, one former employee claimed she had been left with no choice but to rely on savings to get by.
After she and her husband divorced, Safia Minney left the company in 2015, but she is still a shareholder and served as a non-executive board member up until July of this year. James Minney is still one of just two directors for the UK company and a 50% shareholder in People Tree’s parent company. In 2015, he was given control of the Japanese company, and he later made