Australia's challenging fashion retail climate has scalped its second victim in 2020 as handbag and accessories retailer Colette by Colette Hayman falls into voluntary administration.
Deloitte Restructuring Services has today announced its partners Vaughan Strawbridge, Sam Marsden and Jason Tracy were appointed voluntary administrators on 31 January.
The appointment happened just two weeks after KPMG stepped in to administer iconic clothing retailer Jeanswest, which resulted in a plan to close 37 of its 146 stores and make 263 employees redundant.
Colette by Colette Hayman has a similar store count to Jeanswest at 140 across Australia and New Zealand, and for now all of them continue to operate.
The first meeting of creditors will be held on 12 February to determine the likely fat of the company, which employs more than 300 permanent staff plus casuals and has annual gross sales of more than $140 million.
"Colette By Colette Hayman has, unfortunately, been impacted by the current weak retail environment, as have many others," says Strawbridge.
"Our focus is on continuing to trade the business while we seek either a recapitalisation of the Group or a sale of the business.
"Given the strength of the brand we are confident we will be able to secure a future for the business and preserve the employment of as many people as possible."
Strawbridge says as trading continues employees will continue to be paid by the administrators, and he is confident there are sufficient assets to meet all employee entitlements.
The administrators will continue to honour gift cards.
The collapse of retailers like Jeanswest and Colette by Colette follows a trend that has been ongoing for companies that can't keep up with a fast-changing retail environment challenged by e-commerce. In late November women's fashion retailer Bardot appointed KPMG to manage its voluntary administration.
Bardot announced in early January that it will close 56 stores across the country in order to remain in business resulting in more than 500 employees losing their jobs.
Department store chain Harris Scarfe similarly fell into receivership in December despite its strong customer satisfaction track record and annual sales of $380 million.
The company announced in early January that it would close 21 stores, meaning around 88-full time, 128-part time, and 224 casual positions would be impacted.
The scenario is not however all doom and gloom for the country's fashion retailers.
City Chic Collective (ASX: CCX), formerly known as Specialty Fashion Group (SFG), has undergone a transformation that lifted its fortunes from a $9.3 million loss in FY18 to a $16 million profit in FY19, prompting a 262 per cent surge in its share price over the past 12 months.
Shares in fashion jewellery retailer Lovisa (ASX: LOV) have almost doubled in the past year despite market headwinds, with profit up 3 per cent at $37 million in FY19.
Mozaic Brands (ASX: MOZ) - formerly known as Noni B which is still one of its key brands along with Rockmans, Millers and others - recently reported its EBITDA would likely be up 36 per cent in the first half of FY20 at around $32 million. Its share price did however drop after announcing 20 per cent of the group's stores were directly impacted by the ongoing bushfire tragedy.
One thing these three listed retailers share is an uplift in their margins to support profit growth.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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