People Tree's UK arm goes into liquidation

Ethical fashion brand, People Tree, has put its UK arm into liquidation after owing UK suppliers, customers and staff £8.5 million.

People Tree was founded in Japan in 1991 by the former wife and husband team Safia and James Minne. In 2000 it opened operations in the UK and quickly became an influential voice in UK fashion. Ahead of its time, the company used organic materials and campaigned for better treatment of garment workers around the world.

However, according to The Guardian, it warned creditors that it could not meet its debts after a deterioration in trading performance.

The company’s creditors have received a letter saying a meeting will be held on 28 September to dissolve the company, which has made most of its workers redundant in recent months. The conference will appoint liquidators from Opus Restructuring & Insolvency to wind up the business.

People Tree’s European website is continuing to operate, with a note promising that shipping to the UK will begin soon.

Despite stepping down in 2015, Safia Minney commented: "I’m sorry for the producers who depended on the business for their livelihoods, investors and customers who have been let down."

James Minney, Chief Executive of People Tree in the UK and Japan, added: "I am extremely sad at this situation. Our customers and our wholesale stockists have been and always will be the absolute rock of support for People Tree. Our suppliers and creditors, with whom we have been in close discussions throughout this difficult time, have been supportive throughout our journey.

"The basic mission of fair trade, whether fashion or other goods, of honouring people’s traditions, hand skills, and the love they pour into the products, and creating sustainable market access, was and is paramount, even though we cannot continue our business in the UK."

As for creditors, several suppliers in India are owed over £100,000, according to the letter to creditors. What's more, People Tree’s former UK staff, most of whom have not been paid since at least July but many of whom were not made redundant until mid-August, say they have not received money owed. One source said it was  "horrific" that the ethical company had not been able to pay suppliers.

Documents relating to the liquidation, seen by the Guardian, showed that the group’s 14 members of staff are together owed just over £243,000 – or an average of £17,000 each. The icing on the cake? Some shoppers have even been waiting for refunds since June.