SCOTLAND'S richest man yesterday became the latest victim of the recession as his high street fashion chain went into administration.
Sir Tom Hunter was forced to shuffle millions of pounds of debt within his business empire as USC faced up to massive losses. Some 300 jobs are threatened by the likely closure of 15 of its 58.
The news deals a further blow to Scotland's high stre
ets, which have seen a slew of well-known names go to the wall over the Christmas period.
Yesterday saw closure of 34 Woolworths stores in towns and cities across Scotland, while administrators were also called in at childrenswear chain Adams.
Furniture retailer MFI and music and games chain Zavvi. formerly Virgin Megastores, are already in administration.
Also under threat were chains Whittard of Chelsea and the Officers Club. Both called in administrators but were immediately sold in rescue deals.
Woolworths is due to close its last store on January 5 unless a last-minute buyer is found.
Kilmarnock-based USC was yesterday forced to call in administrators, although a new company, Dundonald Holding, rescued 43 of the better performing stores in a buy-out.
A spokesman for Sir Tom said the stores facing closure had been "haemorrhaging" money as the retail sector continued to suffer the effects of a drop-off in consumer spending.
Sir Tom, estimated to have a fortune of over £1billion, was forced into the move after "discussions" with bankers HBOS.
The tycoon, who made his fortune selling his sporting goods chain Sports Direct to JJB, bought the USC chain in 2004 via his investment company, West Coast Capital.
The new owners of the 43 shops, Dundonald Holdings, is also owned by Sir Tom. Yesterday a spokesman for West Coast Capital hailed the deal, saying it would save 1,127 jobs.
The deal means the new company is not liable for debts under its former owners, West Coast Capital. Creditors would include suppliers of the group's youth-oriented, labelled clothes lines including Adidas and Diesel.
However, Sir Tom's spokesman confirmed the group would continue negotiations to pay back suppliers and shop landlords in danger of being left out of pocket due to the failure of the loss-making stores.
Ewan Hunter, Sir Tom's spokesman, said: "We are negotiating with all our suppliers. What those businesses depend on is a profitable future. Therefore we will work with suppliers and landlords in a way that rewards them and us."
Although the amount of money Sir Tom's new company had to spend to retain the stores was undisclosed, spokesman Hunter confirmed it was a "multi-million-pound deal".
The USC fiasco is the latest problem threatening Sir Tom's fortune. The tycoon has been in talks with his bankers, HBOS, to renegotiate the terms of several deals that have gone sour, part-icularly those hit by the downturn in retail and housing.
In the run-up to Christmas, he had to renegotiate the terms on a number of deals which hit the value of his investments.
Negotiations included reducing his 40 per cent stake in Wyevale Garden Centres to 25 per cent.
Sir Tom also wrote off £35million, reflecting the fall in value of his stake in house builder Crest Nicholson. Many had criticised his eagerness to buy the housebuilder in March 2007 for £715mllion as it was seen as too expensive.
The spokesman confirmed Sir Tom is still involved in negotiations to refinance the UK retirement home builder McCarthy & Stone. He holds an eight per cent stake in the business along with other investors including media baron Richard Desmond. The group of investors, along with bankers Rothschild, bought the firm for £1.1billion in 2006.
The negotiations mark a major shift in the relations between Sir Tom and HBOS, which faces its own well-publicised problems the result of which it is on the verge of being taken over by Lloyds TSB. Several of Sir Tom's deals were supported by the bank's then head of corporate banking Peter Cummings.
Under the terms of the Lloyds TSB takeover of HBOS, Cummings lost his place on the board and before Christmas officially confirmed his departure from HBOS in an email to colleagues.
The credit crunch also affects Sir Tom's status as one of Scotland's greatest philanthropists.
Last year he announced his intention to give away almost his entire £1billion fortune to charitable causes over time.
Knighted in 2005, Sir Tom was ranked in 68th position in the 2008 Sunday Times Rich List, although he fell eight places from the previous year.
Nonetheless, he remained the highest-placed Scot on the list, but recent events have caused speculation that the economic downturn could result in his losing that spot next year.
Retail chain USC has been loss-making for a number of years. Of the 15 worst performing stores, only one was in Scotland, a small store in Edinburgh's Princes Mall. The group's Edinburgh Princes Street store is now owned by the new group.
The news came hard on the heels of the latest set of gloomy predictions for the UK economy.
A report yesterday revealed that next year could be the worst for jobs in two decades, with 600,000 workers facing redundancy and others having their pay frozen.
The Chartered Institute of Personnel and Development (CIPD) warned that when the recession ends, more than a million jobs could have been lost in the UK.
The institute, which represents managers and personnel staff, forecast that unemployment will stop short of three million, but it warned that the period between New Year and Easter will be the worst for redundancies since 1991.
A survey of 2,600 workers by the CIPD showed that more than one in four did not expect a pay rise next year; a similar number believed any wage increase will be lower than in 2008; while some feared a wage cut.
Meanwhile, the British Retail Consortium yesterday said retailers will continue to slash prices in 2009.
The huge crowds which gathered for pre- and post-Christmas sales made the high street look healthy but shoppers have only spent cautiously, according to the British Retail Consortium (BRC), and the last-minute boost will not compensate for a bleak period for retailers.
Richard Dodd from the BRC said: "It's been a very busy few days, many of the sales started earlier this year than they have done before. We have seen sustained interest since Box- ing Day.
"It's good news that lots of shoppers are out there, and that the sales and promotions that retailers are using are creating valid interest. But it will still prove to be the case when the figures are in that as a whole it has been a poor December."
From selling trainers to billionaire tycoonSCOTLAND'S richest man began his business career selling trainers from the back of a van.
From such humble beginnings, Sir Tom Hunter, the son of a grocer, built up the Sports Division chain, employing 7,500 people across more than 250 stores.
He eventually sold the company to JJB Sports in 1998, making more than £250 million.
The 47-year-old, who graduated from Strathclyde University's business school, subsequently established West Coast Capital, an investment firm, in 2001, which has shares in such high street chains as USC and Office.
Last year Sir Tom was declared to be Scotland's first home-grown billionaire, ranking the 60th richest person in the UK, with an estimated fortune of £1.05 billion.
Determined not to keep his good fortune to himself, the tycoon has had a longstanding commitment to philanthropy and charity.
In 1998, he established the Hunter Foundation which supports education and entrepreneurial projects. Last year he pledged to give away £1 billion of his fortune to charity.
He was also one of the prime supporters of the Make Poverty History campaign and urged world leaders at the G8 summit in Gleneagles in Scotland in 2005 to use their power and influence to eradicate poverty.
Sir Tom also joined forces with former US president Bill Clinton and pledged an initial £6 million to the Clinton-Hunter Development Initiative to support developing communities.
