Almost £50m is to be paid by fashion brand JD Williams to settle a claim from Allianz Insurance.
The deal, which has been agreed without the admission of liability, comes after a claim was first made in January 2020. It related to "significant amounts of redress" paid to customers by JD Williams and the insurer "in respect of certain historic insurance products", including payment protection insurance.
As a result of the settlement deal the label, which is owned by Manchester-headquartered N Brown, is to hand over £49.5m. The "full and final settlement" is lower than the sums claimed by Allianz Insurance, which had exceeded £70m.
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In a statement issued to the London Stock Exchange, N Brown said: "The settlement removes a significant element of uncertainty and distraction for JDW and allows the company to focus on creating shareholder value through its core business activities as it continues its transformation."
The group also said it has "sufficient liquidity to meet the cash flow requirements of the settlement", including unsecured net cash of £82.9m as at December 21, 2022, as well as access to a revolving credit facility of £100m and overdraft of £12.5m, which are both fully undrawn as at January 9, 2023.
Payment of the settlement is expected to be made by the end of January.
Shares in N Brown, whose brands also include Simply Be and Jacamo, rose by almost 7% in early trading following the announcement.
The group is expected to publish its results for its third quarter on Thursday, January 12.
In October 2022, N Brown revealed that its revenue for the six months to August 27 totalled £331.5m, down 4.6% compared to the same period in 2021.
Its statutory pre-tax profits were also slashed from £28.4m to £7.2m.
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