Top end men’s’ fashion brands Herringbone and Rhodes and Beckett have gone into voluntary administration, just one week after prominent fashion labels Marcs and David Lawrence called in insolvency experts.
Insolvency specialist Cor Cordis has been appointed to disentangle the affairs of both companies, to make them more attractive to sell and to secure the best outcome for creditors and staff.
Bruno Secatore from Cor Cordis has indicated that unprofitable stores across both chains will close and staff will be redeployed, although some may lose their jobs in the fall out.
Van Laack Australia, a subsidiary of high-end German suit maker van Laack, is the majority owner of both labels and also the biggest creditor, although the extent of the debts has not been revealed.
There is a strong possibility that both brands will be sold. At stake are 29 stores, including a concession in Myer and in shopping centres such as Melbourne’s Chadstone, and the livelihoods of 140 employees.
The turnaround firm is hoping to act decisively to attempt to salvage as much as possible.
Mr Secatore told Fairfax: “Our main aim is to determine what stores are burning cash because we need to deal with those.”
He said Cor Cordis would concentrate on assessing employee entitlements and secured and unsecured creditors in the first instance.
“We would like to sell them as a package but we would accept offers on both brands separately,” Mr Secatore told Fairfax.
“We understand that both brands are well-regarded and dominate their premium segments in the Australian market so finding a buyer for the ongoing business is a priority for us.”
He said sales were “booming” for both brands online and there was a possibility this side of the business would be sold separately.
The collapse of the two brands appears to be down to a number of issues: fierce online competition from cheaper brands; high overheads for wages and leases and an influx of cheaper overseas fashion stores into Australia, both online and bricks and mortar.
Marcs and David Lawrence both experienced similar problems.
Insolvency firm Rodgers Reidy is currently sorting out what to do with Marcs and David Lawrence’s 52 stand-alone stores, 11 outlets and over 140 concession stores operating out of Australia and New Zealand, including Myer and David Jones.
In Australia alone the companies employ around 1,130 staff. Of these, 640 staff are casuals, 260 staff are full-time basis and 230 work part-time. There are 10 stores in New Zealand employing 42 staff.
The Administrators said staff wages had been paid up until January 30, 2017 and superannuation until December 31, 2016.
It compounds the trouble for fashion retail in Australia. Payless Shoes and children’s clothing company Pumpkin Patch went under last year.
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