A listed retailer that owns such brands as Review, Yarra Trail, JETS Swimwear Australia, Marco Polo and Black Pepper has entered voluntary administration, just three weeks after announcing the progressive reopening of stores.
The directors of PAS Group (ASX: PGR), whose Designworks division also supplies private labeled products and licensed brands including Everlast, Mooks, Dunlop and Lonsdale, have appointed PwC partners Stephen Longley, David McEvoy and Martin Ford as voluntary administrators.
Leading into the pandemic The PAS Group had performed relatively. EBITDA rose 78 per cent to $10.1 million in the first half of FY20, although after tax it ran at a net loss of $1.2 million.
That result was largely to do with the closure of 42 bricks-and-mortar stores in the prior period, including the exit from 14 David Jones concessions followed by a an exclusive partnership agreement with Myer for PAS' Review brand.
But on 27 April the company announced it was pursuing restructuring options and had appointed a team of advisors to assist. On the same day it was revealed Designworks managing director Brendan Santamaria had resigned, and would be replaced by group CEO Eric Morris who has since taken on both roles.
On 8 May the company announced it had the intention of reopening its Australian stores by the end of the month, some of which would be on a reduced hours basis. Throughout the pandemic the company has still fulfilled online orders from a limited number of physical stores.
In its announcement today, the company emphasised it was in good financial shape but the view had been taken that voluntary administration would be the best course of action.
"While the Board is of the view that the company is solvent, given the issues as a result of unfavourable financial market conditions, the COVID-19 crisis and the challenges of restructuring in that environment, it felt that Administration was the best way to affect change while protecting all stakeholders," the company said.
"The Administrators will undertake a preliminary review and assessment of the Group's operations that have been impacted by difficult trading conditions, including the COVID-19 pandemic.
"PAS Group enters voluntary administration with the strong desire to restructure the Group and allow it to continue operating strongly and sustainably into the future."
The group says stores will continue to trade as normal, in line with current local restrictions across Australia and New Zealand, and all store credits and vouchers will be honoured.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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