Two more retailers insolvent
The number of Australian retailers to move into voluntary administration over the last week has come to five, with men’s formalwear brands Herringbone and Rhodes & Beckett appointing administrators on Tuesday evening.
The retailers, who are the licensees of their namesake brands in Australia, have a combined 29 stores across the country, many of which are slated to close in the coming weeks as insolvency firm Cor Cordis prepares the companies for potential buyers.
“We’ve got some underperforming stores so the last day and a half we’ve been working on those to determine which ones we keep,” administrator Bruno Secatore told Inside Retail.
Cor Cordis will continue to operate both businesses while assessments are made, supported by German-based retailer Van Laack, who is a majority shareholder in both companies.
The retailers now join the likes of David Lawrence, Marcs and Allphones in the search for buyers, only a few months after both Payless Shoes and Pumpkin Patch failed to find a saviour.
However, Secatore says that they’ve already fielded a number of initial phone calls in the last 36 hours, saying that it’s likely a buyer will be found in the next three-to-four weeks.
Secatore said a marketing campaign will begin today to gauge interest.
“We’re offering both businesses to one group or individual businesses so it’s up to the potential purchaser.”
According to Secatore, Van Laack made the decision to appoint administrators after struggling with a variety of problems that are representative of a “general trend” in retail.
“The business suffered from change in consumer sentiment, high overheads, unfavourable leases, online shopping,” Secatore said.
Commenting on the news, Australian Retailers’ Association (ARA) chief Russell Zimmerman said that the scene has become far too common in the industry, outlining concern for the combined 140 employees at the companies.
“There are some inherent issues in the industry and we need to make sure that moving forward we sort those out,” he told Inside Retail.
Pointing to unsustainable rent provisions and the high cost of employment, Zimmerman said that while ABS figures indicated growth for footwear and clothing in excess of six per cent year-on-year, there is still pain to go around.
“There are far more players in that area locally, internationally and online,” Zimmerman said. “For a few retailers the international brands have walked right into their market share and if someone does that then you have to be prepared to step up to the plate.”
Inside Retail understands that Van Laack will be surrendering its position as majority shareholder in any prospective sale, but Secatore confirmed that it will retain an “interest” in both companies.
Administrators did not rule out accepting a deal that would see the retailers dismantled for parts, saying that they will look at all deals that stand to benefit shareholders.