Karen Millen recalls the agony of going bankrupt and losing £35m 

Two weeks ago, Karen Millen’s phone pinged with a ‘Google alert’ to a newspaper story. Not only, she learned, was Kate, the Princess of Wales, wearing a dress from the fashion range that carries her name — but so, too, on the very same day, Prime Minister Liz Truss was out and about in one of the label’s frocks.

Karen received a flurry of messages on social media from people who’d seen the PM deliver her ‘big speech’ at the Conservative Party conference in a £225 stylish, red Forever dress, followed by Kate arriving for an official visit at the Royal Surrey County Hospital in a £220 yellow pleated version of the same belted frock — all congratulating her on this design double coup.

Two decades ago, this would have been sweet music to Karen’s ears, prompting a rush, and the ringing of tills, in her 130-plus outlets. Yet that day, she felt, well . . . a little strange.

On the one hand, she was hugely proud. The dresses bore more than her name on the label: they held her DNA, her passion, her immutable creative stamp.

On the other, she felt incredibly sad. For Karen has sold the business, which no longer has a High Street presence, lost the £35 million she made from it, been declared bankrupt and — maybe the biggest insult of all — repeatedly been refused permission to use her own name, or approximations of it, in any retail capacity.

Catherine Princess of Wales Catherine Princess of Wales visit to Royal Surrey County Hospital, Guildford, UK – 05 Oct 2022

‘I felt such a mixture of emotions that day,’ Karen admits.

‘Pride that two of the country’s most high-profile women were wearing labels with my name on them, both looking great and making headlines.

‘At the same time, there was some sadness because the brand has nothing to do with me any more.’

Karen took the congratulations proffered graciously. And why not? Although she had nothing to do with these particular designs, they were unmistakably ‘her’.

And now, having spent years in the wardrobe wilderness, the label, once a staple of any self-respecting professional woman is experiencing a rather unexpected comeback, as demonstrated by Liz and Kate.

The resurgence feels particularly sweet because everyone, not least Karen herself, had good reason to think the brand’s glory years were well and truly over.

After going into administration in 2019, the online branch of the business was bought for £18.2 million in August 2019 by Manchester-based company Boohoo — the online ‘fast-fashion’ outlet for 16 to 25-year-olds, which also owns Coast and PrettyLittleThing.

The buy-out came just two years after Karen had been declared bankrupt in the High Court after being unable to pay a tax bill for an eye-watering £6 million.

The demand led to her losing her £2.5 million family home, a six-bedroom Grade II-listed building set in five acres in Wateringbury, Kent, which had a swimming pool, lake, cinema and football pitch.

‘We’d lived there for 20 years and I was given a year’s grace — it was a big house to empty — so I was literally driving out of the gates when the receivers turned up to change the locks,’ she recalls, shuddering at the memory.

‘It was an awful time. My children lost their family home. My youngest, who had been two when we moved in, took it hardest.

‘When I heard that Boohoo had bought the company, I was pretty devastated,’ adds Karen. ‘Mainly because it meant the stores would close and something we’d worked for 20-odd years to build would disappear from view.

‘I feared it would be out of sight, out of mind.

‘However, this resurgence has changed my mind. Maybe it is the perfect company to breathe life back into and return the label to where it used to be.’

Karen Millen has sold the business, which no longer has a High Street presence, lost the £35 million she made from it, been declared bankrupt and — maybe the biggest insult of all — repeatedly been refused permission to use her own name, or approximations of it, in any retail capacity

Karen was declared bankrupt in 2016 and was unable to pay a £6million tax bill. This led to her losing her £2.5 million family home, a six-bedroom Grade II-listed building set in five acres in Wateringbury, Kent

As well as being a favourite of two of Britain’s most high-profile women, actress and model Elizabeth Hurley has launched a curated collection for the brand’s Icons section.

Jill Biden is also a big Karen Millen fan and our own former first lady, Carrie Johnson, rented a black square-necked coat dress by the label for the Queen’s funeral.

‘Karen Millen was always the go-to place for power dressing, clothes that could be worn for work and then glammed up, with jewellery and shoes, for a night out or a special occasion,’ says Karen.

‘We were one of the first big High Street clothing brands to launch in the 1980s, and it saddened me when the stores closed and it faded into the background for a while.

‘It felt like my legacy was vanishing, so it’s great to see people talking about — and wearing — it again.

‘But it’s amazing how many people think I’m still involved with the company after all this time, because it still bears my name. So, I responded to their kind messages last week saying: ‘Well, it’s nothing to do with me, but thank you.’

‘Then I turned on the TV and Anne Diamond was interviewing retail expert Teresa Wickham on GB News and they were discussing the brand, how I’d set it up with my ex-husband (Kevin Stanford), making shirts from my bedroom at the start, and what a huge success it had been in the 1980s and 1990s.

‘Listening to them was the most surreal experience — like eavesdropping on my own obituary — when I am still very much alive and kicking!’

It’s testament to Karen’s incredible resilience that she is indeed still going strong after everything she has endured over the past 20 years.

In July 2004 — having sold 45 per cent shares in the company to a consortium in 2001 — she and Kevin, who were by then divorced, signed the papers handing over the entire business to Icelandic company Mosaic Fashions, which had been part of the original consortium and owned several other High Street chains.

Karen — who has three children with Kevin, now aged between 25 and 31 — poignantly, described this portentous event as ‘like watching your child grow up and leave home — but with the knowledge that they would never come back’.

When we speak over FaceTime — she is in Italy house-hunting with her partner of ten years, Ben Charnaud, who runs a commercial property business — she tells me: ‘Things were very strained between Kevin and me, and I don’t think we could have carried on working together, so it just seemed like the right time to take their offer for the business and allow it to grow.

Carrie Johnson wore a rented Karen Millen dress to attend the Queen’s state funeral at Westminster Abbey (pictured with her husband Boris)

Actress and fashion icon Liz Hurley launched a clothing line with Karen Millen which is said to embody her ‘faultless’ style

‘We had been very young when we got together — Kevin was 20 and I was 19 — and over the next two decades we built this small empire and had three children, and we didn’t realise that we were drifting apart in the process.

‘It was all about the juggle of work and the children, without enough focus on our relationship.’

When the Icelandic bank Kaupthing collapsed during the financial crisis in 2008, Karen lost large sums of money it had invested on her behalf.

She has accused the bank of fraud — several former bosses were, in fact, jailed for that crime in 2013 — and spent many years fighting its administrators to recoup her losses.

Adding insult to injury, administrators for the bank, which also owned Aurora Fashions, the company which took over Mosaic Fashions in 2009, also refused the designer’s repeated attempts to gain permission, ultimately through the courts, to use her name, sold as part of the business, or even just Karen or KM, to launch a homeware range.

Judges agreed with the company that it would create ‘confusion’ for shoppers. ‘In hindsight, I shouldn’t have pursued it,’ she tells me. ‘If I could go back I wouldn’t do it. It was just a waste of time, life and money.’

Indeed, the legal fees have been estimated at £3 million.

Worse was to come: back in 2001 Karen’s accountants had advised her to enter a tax avoidance (which she says she believed was a tax delaying) scheme, called Round the World.

HMRC successfully challenged the scheme in 2010 after finding that it was ‘carefully orchestrated’ from the UK and could therefore be taxed and, in 2016, issued Karen with a notice to pay £6 million.

That’s when she lost the house — everything. ‘I felt very let down. But at the same time I take responsibility for allowing myself to be in that position. So I’m not looking for people to feel sorry for me. I made mistakes and, sadly, put trust in professional people who let me down,’ she says.

The ordeal affected her physically and, for many years, Karen suffered agonising back pain which failed to respond to treatment but, miraculously, disappeared the day she relinquished the family home and moved on with her life.

However, Karen has not been in a position to get back on the property ladder and rents ‘a small cottage’ she shares with Ben, who splits his time between Kent and Australia and on whom she says she ‘depends’ financially.

This spectacular fall from grace has, she thinks, been easier to bear because she wasn’t born into wealth.

US first lady Jill Biden wore Karen Millen as she listened to speakers during the Phoenix Awards Dinner at the Washington Convention Center in Washington, DC

The third of four children, she was raised in a three-bedroom council house in Maidstone, Kent, by her carpet-fitter father, Anthony, and secretary mother, Sheila.

Anthony suffered with rheumatoid arthritis and money was tight, although her parents scrimped and saved for an annual family caravan holiday.

It was a far cry from the upbringing Karen was able to give her own children, all privately educated, who enjoyed lavish holidays in far-flung places and were ferried around in their mother’s £200,000 Bentley GTC.

‘I’ve always had my feet firmly on the ground, and having big feet — they’re size 7 and I’m only 5ft 2in tall — probably helps,’ says Karen, who is refreshingly down-to-earth, laughing self-deprecatingly.

Now 61, and still an elfin size 8, Karen now finds herself ‘at a crossroads’, not sure where she and Ben want to put down roots — though Italy is certainly a possibility — let alone how she would like to direct her design talents.

Just before the pandemic, she launched an online homeware business, Homemonger — she had wanted to call it Room by KM but, of course, couldn’t, legally — importing furniture and ornaments from Indonesia. However, when the world pretty much shut down for two years, it caused huge transportation headaches.

‘I love interiors but we’ll decide if we want to put further investment into it, once we’re more settled,’ Karen says.

‘We’re at an age where the next ten years count, so we’ve got to make sure we’re doing what we want to do and in a place we want to be. As a mother, you never stop worrying about your kids, but mine are now old enough to not need me on hand all the time.

‘I’ve had the big house and the fancy cars and I don’t need that stuff any more. Having a comfortable home and being able to go on nice holidays is enough for me.’

Amanda Holden is known to be a fan of the brand, and wore this garish dress from Karen Millen earlier this month

With Karen Millen making news again, however, she is bracing herself for confused encounters with shop and restaurant staff.

‘I’d hand over my bank card, before chip and Pin, and waitresses would see my name and say: ‘Oh, Karen Millen! Like the shops!’,’ she says.

‘And when I forgot my ticket to collect an old designer dress from the dry cleaners last week the guy behind the counter asked my name and then proceeded to look for a Karen Millen dress.

‘When I explained that I was Karen Millen, but the dress had a different label, he said: ‘Are you the woman behind the clothing brand?’ I told him yes, or that at least I used to be.’

Given how things have panned out for Karen, who was awarded an OBE for services to retail in 2007, these sound like difficult conversations to be having as she goes about her day.

‘To be honest, it’s easier now that the business is something I can be proud of again,’ she says. ‘They are clearly trying to give it new life, bring it back to where it was.

‘Women want to dress up after being locked down, in trackies, for two years, so the timing is perfect. If they can get the product right, which, given who’s wearing the clothes, they seem to be doing, it should be a great success.’

Since she is cognisant of the tricks of the trade, I ask if she knows how the company might have pulled off the coup of having a princess and a prime minister wear their garments on the same day.

‘I don’t imagine either woman sits at her laptop looking through collections from different retailers, but they will have stylists advising them,’ she says. ‘So I guess it could be sheer coincidence, or maybe someone at Boohoo has been sending dresses to both their stylists.’

Would she, I wonder, return to the fray at Karen Millen, if the opportunity arose?

‘Never say never,’ she answers, smiling. ‘Maybe, finally, this would be the right time.

‘I certainly want only the best for the brand and its loyal customers. I want to be proud of the name and everything it stands for. That way I can feel happy with the legacy I leave behind.’