The Very Group has slumped to a £500m loss after writing off a major loan to the Barclay family, as lenders prepare to take control of the business empire.
Very, owner of Littlewoods.com, said an intercompany loan transferred to the family’s business empire several years ago had been voided because it could not be repaid, pushing the group into the red.
The deterioration of the loan – which was worth £525m and was granted to Very’s parent company, which is wholly owned by the Barclay family – meant the retailer’s losses soared to £505m for the year ending June from a loss of £16.3m last time.
It comes as lenders attempt to recover debts from the business in a move that is likely to see the Barclay family lose control of the Very business.
In the process one of Very’s main creditors, US private equity group Carlyle, is expected to work with Abu Dhabi-based IMI to launch a complex debt-for-equity swap before the end of the year.
Very Group itself was created 20 years ago through the merger of retail businesses Littlewoods and Shop Direct, which had been acquired by the Barclay brothers, Sir Frederick and the late David Barclay, just a few years earlier.
The retailer is considered a central part of the Barclay family business empire and has remained so despite growing tensions in other parts of the family’s expanding empire, leading to a major downsizing.
In 2023, the Barclay family lost control of Telegraph Media Group, owner of The Telegraph newspaper, after failing to repay loans to Lloyds Banking Group.
The family also sold delivery business Yodel, which previously operated as the logistics arm of The Very Group.
In early 2015, the Barclay brothers reached a deal with Qatar’s sovereign wealth fund to sell their majority stake in Coroin, a company that owns five-star hotels in London, including The Connaught, Claridge’s and The Berkeley.
They also sold the Ritz Hotel to Qatari businessman Abdulhadi Mana Al-Hajr for around £700 million in 2020.
Very Group’s adjusted profits rose 15.9 per cent to £307.1m, accounts show.
Sales rose 1.8 per cent to just over £2bn in what the company described as a “challenging retail market”.
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