Entertainment Rights has secured£13m in facilities from HBOS to safeguard its future until the end of February and has appointed the boss of its US operations as its new chief executive.

The£13m will help cover potential cash flow shortfalls during the period and replaces the short term increase in working capital facilities of up to£1 million announced on 31 October 2008.

The company said it was continuing to “work closely with its bank towards securing new, longer term, funding arrangements for beyond the end of February.

New boss

The embattled kids IP company has also quickly replaced Nick Phillips, who left the company on 5 December, with Deborah Dugan.

She has served as president and chief executive of Entertainment Rights North America since April 2007, prior to which she was president of Disney Publishing Worldwide, the world's largest publisher of children's books and magazines.

Chief creative and commercial director Jane Smith has also left the company today. Smith has worked at Entertainment Rights since December 1999 and played a key role in building the brand and content portfolio, including Postman Pat and Guess with Jess, to more than 3,600 hours.

Group financial controller Paul Ashworth has also replaced Irvin Fishman as company secretary from today.

Entertainment Rights said it was still too early to judge Christmas trading, but “initial indications” were that shipments of goods into the retail trade will be later than anticipated and that sales will be lower than expected.

Dugan said: “Despite a difficult global economy, I am confident about our prospects and the global potential of our portfolio. With some of the world's most popular brands and new business partnerships in the pipeline, we are poised to maximise our opportunities. Our team is making excellent progress and I am excited by the challenge.”

Chairman Rod Bransgrove described Dugan as “a highly distinguished chief executive whose industry knowledge and contacts will prove extremely effective in taking the company forward.”

He said: “Deborah's extensive global experience and her deep knowledge of the US entertainment business, our largest geographical market, position us well for growth. Together with our recently appointed chief financial officer, Edward Knighton, I am confident that we now have the right executive team in place to take us to the next level.”

Job cuts and Woolworths fall out

The company also confirmed plans to shed a third of its employees, cutting staff from 150 to 100 by 31 December 2008.

It said its target of£5m annualised cost savings, announced on 31 October, will have been achieved by the year end.

Entertainment Rights also revealed that Woolworths' Entertainment UK subsidiary owes the company approximately£800,000 despite actively managing its credit exposure in recent months.

Woolworths has resolved to file petitions for administration in the High Court and Entertainment Rights is seeking clarification as to the recoverability of the£800,000 and the effect of the potential loss to the company.

Should the sum not be recoverable then the cash impact would be felt in spring 2009, and would be mitigated by savings in royalty payments to rights owners of£300,000 leaving a net exposure of approximately£500,000.

The effect of Entertainment UK's administration on trading for the remainder of the financial period is uncertain, although the company is actively assisting other retailers who wish to replace the business which would otherwise be lost.

Entertainment UK was one of the Entertainment Rights UK Home Entertainment division's largest customers.