Rising costs have forced the closure of Edinburgh-based Atterley.com, the boutique online fashion retailer headed by tyre entrepreneur Mike Welch.

Brian Milne and David McGinness of French Duncan have been appointed joint provisional liquidators of the business, which was founded in 2012. It has closed with immediate effect with the loss of 22 jobs.

Backed by Glasgow-based Maven Capital Partners, PDS Multinational Group and a number of private investors, Atterley described itself as “home of the world's best boutiques". The business connected customers to more than 400 mainstream and independent designer brands and offered an online platform for fashion boutiques accepting orders, passing payments to retailers, and distributing goods.

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Mr Milne, a partner and head of restructuring at French Duncan, said Atterley was unable to continue trading amid the current inflationary environment.

"The business has recently been impacted by higher distribution and postage costs involved in sending out products to customers," he explained. "There has also been an increase in export and import costs due to Brexit and this has impacted on the viability of the business.

“Staffing costs have increased over the last few years and while investors have been supporting the company for some time, they feel they are unable to continue as the company is not making sufficient sales to be profitable.”

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Mr McGinness, director of restructuring at French Duncan, added: “Unfortunately, all 22 staff at the firm will be made redundant with immediate effect.

"The company’s owners made arrangements to pay the staff’s final salaries shortly before the liquidation commenced. There are no assets to sell so we will be closing the business down and not seeking a sale.”

Mr Welch, who forged his reputation by building online tyre firm Blackcircles.com and selling it to Michelin for £50 million, relaunched Atterley in early 2016 after its previous owner went into administration.