General Pants owned Metalicus collapses
The General Pants owned business appointed administrator Petr Vrsecky from PKF Australia last week, documents filed with the Australian Investment and Securities Commission (ASIC) show.
The company’s 12 retail stores, 15 Myer concessions and its online store are currently being wound down with plans in motion to liquidate all stock over the next two months.
An initial assessment has found that the company owes just under $2 million to a range of trade creditors and a significantly higher amount to General Pants, which is providing management style assistance to administrators.
The business has traded under several owners in recent years after Review owner Pas Group sold the business to General Pants in 2016 to focus on its other brands.
Vrsecky said that there has been no interest in purchasing the business yet and he doesn’t expect there will be.
“Its early stages so there’ still some investigating to do … but fundamentally it’s a classic retail story where wages and rents were far too high for sales,” he said.
The collapse comes at a bad time for Myer, which is already working with global fashion brand Esprit on its exit from the Australian market, announced last week.
PVH Brands Australia, which is responsible for Calvin Klein and Tommy Hilfiger locally, also today unveiled a new expansion plan designed to decrease its exposure to Myer by increasing its own retail network.
A Myer spokesperon said that the department store was in discussions with new brands to add to its offer and would be making announcements in the coming months.
“Myer will work with Metalicus on their exit from our stores. We are constantly in discussions with new brands to add to the Myer fashion offer and will make some exciting brand announcements over the coming months,” the spokesperson said.
The Metalicus collapse comes amid an intensification in competitive pressures in the apparel, accessories and footwear category while ailing consumer fundamentals are restricting overall market growth.
Those competitive pressures will likely only further intensify with the collapse, as administrators wipe up to 50 per cent off products to clear stock.
The company has shut down its Facebook page, saying in a statement sent out to customers via email on Wednesday that there would be savings across its entire range in the coming months.
“Metalicus has long been recognised as an iconic Australian fashion brand and we would like to take this opportunity to thank our customers for their ongoing loyalty and support over the years,” the company said.
The clothing, footwear and personal accessories category that Metalicus traded in struggled in 2017, booking total turnover growth for the year of just 1.5 per cent, less than half the ten-year average annual growth rate of 3.5 per cent, according to ABS data.
Category turnover declined 0.1 per cent month-on-month in March, growing by 3.9 per cent year-on-year.
Queensland University of Technology associate professor Gary Mortimer said the collapse is another example of a discretionary fashion retailer that was stuck in the middle market without a clear value proposition.
“While ‘cheap and cheerful’ continues to grow in discount department stores, fast fashion retailers pick up value seeking consumers demanding on-trend designs and luxury fashion remains insulated, middle-tier fashion struggles,” he said.
General Pants said the Metalicus administration will not impact General Pants Co. or its stores.
UPDATED – 12:34 AEST
More to come.