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Agent Provocateur chief's future in doubt amid sale talks

The chief executive of Agent Provocateur is in talks about his future with the lingerie retailer ‎as it progresses an urgent plan to inject new funds into the struggling business.

Sky News has learnt that Fabrizio Malverdi, who joined just nine months ago, is holding discussions with 3i Group, Agent Provocateur's controlling shareholder, and other directors about his future with the company once a new investor is secured.

Sources close to 3i denied suggestions that Mr Malverdi had informed fellow board members last week that he planned to step down, but acknowledged the talks about his ‎position.

The news comes after 3i signalled that it was open to offers for the upmarket lingerie brand.

Simon Borrows, 3i's chief executive, is said to have asked advisers to offload the company as quickly as possible following the emergence of accounting issues.

Sky News revealed recently that Agent Provocateur's chairman, Chris Woodhouse, had stepped down as chairman of the label, which has included Kate Moss among myriad celebrity models.

Mr Woodhouse handed over the reins to Ian Lobley, a 3i partner.

The accounting issues, which are being investigated by KPMG, follow a difficult trading period for the prominent lingerie manufacturer, which 3i acquired in 2007.

Other key figures - including the former chief executive Garry Hogarth - have also left in the wake of a review last year, led by Goldman Sachs (NYSE: GS-PB - news) , which examined and then decided against a sale.

3i said last year that Agent Provocateur had been "impacted by declining luxury spend in a number of its key markets", the effect of which had been exacerbated by "the inconsistent execution of its recent store expansion programme and the discovery of accounting issues".‎

3i has refused to comment on the detail of the accounting issues, ‎but sources say they relate to an overstatement of profits at the business.

Mr Malverdi, a luxury goods executive whose previous employers included LVMH, was parachuted in last year, with a restructuring plan supported by an additional £4m investment by 3i.

These "challenges", 3i said, had prompted the value of its stake in Agent Provocateur to be reduced by £39m.

3i is also embroiled in a legal dispute with Joe Corre, Agent Provocateur's founder, said to be related to the price paid for his shares in the company.

Sales in the year to 28 March, 2015, the last for which accounts are available, rose 16% to £61.7m, but pre-tax profits fell by more than a quarter to £4.6m.

3i declined to comment.‎