THE retail supplier had set out early for the two-hour drive to London from his Leicestershire clothing factory.

Robert — not his real name — was apprehensive. After weeks on the telephone chasing a debt which ran into tens of thousands of pounds and being continually fobbed off, he decided his only option was to turn up and plead his case face to face.

Arriving at his destination, a fashion chain’s unremarkable headquarters on a west London trading estate, he breezed past the usual security guard, Charlie, with a cheery wave. Robert had been supplying the company for more than a decade, so the pair knew each other well.

But his request to see the finance director was met by the receptionist with a weary shake of the head and a sideways glance at a new, burly security guard who stood impassively, arms folded, blocking his path.

Four hours later, after refusing to leave without his money, Robert was given a cheque. On Friday his bank called to inform him the cheque he was relying on to pay his workforce had been stopped.

An everyday tale of life in the notoriously tough rag trade? Yes. Yet, what makes this significant is that the company behind the retailer in question is Baugur, the highly acquisitive Icelandic investor.

Baugur controls high-street names from Hamleys toy store and the Iceland supermarket group to the Jane Norman fashion chain (see below).

The retailer in question here is MK One, the “fast-fashion” chain that Baugur bought in 2004 for £55m.

When the group bought the 176-store chain, Baugur chief executive Jon Johannesson said it was its first foray into value retailing and an area it intended to develop. He said at the time: “The value sector of the UK fashion market is growing three times faster than the rest of the clothing market.

“We intend to take a greater role in this sector and will help to ensure MK One realises its considerable potential in the UK and across the Nordic region.”

However, despite ambitious plans to open 50 new stores over the next few years, the venture struggled.

Baugur sold the chain to Hilco earlier this month, after three years of mounting losses estimated to be around £38m.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive