Customers worry about refunds as dress firm Chi Chi sold after going bust

Partywear group Chi Chi London was sold after falling into receivership last week, leaving some customers worried they would face an even longer wait for overdue refunds.

The brand, whose products are marketed by companies including Debenhams, House of Fraser and John Lewis, informed customers by email that holding company Chi Chi Collection had fallen into administration on September 8.

Interpath’s joint administrators subsequently sold it to Swindon-based Reem Clothing.

As a result of the administration, customers “unfortunately will not be able to claim refunds in the normal way”, administrators said in an email seen by This is Money.

Reem, customers were told, purchased Chi Chi’s brand, website and social media accounts, which will continue to operate on the same platform.

Chi Chi designs and sells clothing and accessories for women and children.

The fashion retailer was founded in 1982 as a family-owned design house based in North London and adopted an “inclusive sizing” philosophy.

Brothers Gio and Daniel Najar ran Chi Chi London and previously appeared on a Channel 4 show, ‘The Job Interview’, in which contestants battled to win a junior designer position at the firm.

Chi Chi, which designs and sells women’s and children’s clothing and accessories, came under fire from John Lewis in 2021 when the department store was forced to remove the brand’s ‘Lollita’ dress from shelves.

Chi Chi London’s Lollita party dress was on sale for children aged three to 11 on the retailer’s website for £50, but critics highlighted the reference to Vladimir Nabokov’s controversial 1955 novel Lolita, which details child sexual abuse.

Chi Chi faced “challenging trading conditions” since the 2020 Covid lockdowns, according to the letter to clients, with directors unable to “sell, refinance or raise investment in the business as cash flows continued to worsen.” “.

Swindon-based Reem has taken Chi Chi out of administration

Furious customers have taken to Twitter, or X, to express their anger over delayed refunds and undelivered orders, with many claiming the company owes them hundreds of pounds.

One user wrote: ‘I kept trading and taking money from people! Long withdrawal process for a refund now.’

Another customer who is owed almost £500 since early summer told This is Money: ‘It’s strange because they are still selling their clothes with no admin notice on their site, nor is there anything online about it.’

Customers who are owed cash will have to apply to the administrator, who will divide the money remaining after paying secured creditors and staff among everyone who has filed a claim.

Chi Chi buyer Reem describes itself as “revolutionizing the UK clothing shopping experience”, offering “a wide range of the coolest items from the trendiest designer brands” for men.

This is Money has attempted to contact both Chi Chi and Reem, but neither responded to calls or emails.

Insolvencies have continued with an upward trend

The most recently compiled data by the Government shows that while business insolvencies in July decreased compared to the same period last year, they continue to trend above pre-pandemic levels as companies confront an economic backdrop more difficult.

Wilko is the latest notable retail brand to collapse after last-minute rescue talks collapsed on Sunday night.

News from heaven It also reported on Tuesday that electric car leasing company Onto had fallen into administration after sponsors such as L&G refused to invest more capital in the company.

Gavin Maher, joint administrator at Teneo Financial Advisory, told Sky: “Onto has suffered from the sharp drop in the residual value of electric vehicles in the first half of 2023, rising interest rates and the restriction of disposable income and was unable to secure additional financing from its shareholders.

“After entering administration, Onto will continue to serve existing customers while the administrators explore strategic options.”