The arrival of Sir Edward Frere surprises Sir John. Jan finds retailers dropping their options for her second line and realizes she must find another designer. Meanwhile, the Mermaid yard continues to lose business over unanswered questions surrounding the catamaran disaster. Jan urges Leo to move on with his life. Polly issues a warning to Gerald. Kate admits to Jack that she's had one last fling at gambling. Deciding to open her own line of boutiques, Jan tells the bank she intends to buy out Ken. Avril warns Tom that Frere will probably withdraw The Barracuda. Sarah sides with Mark against Ken and cools their affair. Avril pleads Tom's case, but Frere reminds her that he doesn't have patience for losers. Sir Edward suggests that Sir John sever his business relationship with Frere Holdings. Frere realizes that the competition is his own father.