Collapsed fashion retailer Brown Sugar has been rescued out of administration, providing a glimmer of hope for the retail and apparel sectors which have suffered during the past few months, as consumers shut their wallets.
Just a few months after the Brown Sugar collapse Deloitte partner Sal Algeri said a new entity called Brand Directions had purchased the business, with all 16 stores to remain open and offers of employment made to their 100 employees.
“Any outstanding entitlements of those staff members who elect to accept those offers will be transferred to the new owners,” Algeri said in a statement.
“Brand Directions has also indicated that it is considering re-opening some stores that have already closed and re-hiring a number of staff who lost their jobs as a result.”
Algeri was contacted by SmartCompany this morning but no reply was available prior to publication. He noted in the statement the Brown Sugar business will continue to trade under that name.
“Given the current retail environment the administrators are extremely pleased to have been able to secure a purchaser who is keen to continue operating the business,” Algeri says.
The rescue comes after Brown Sugar, which had 220 employees, collapsed in August with administrators saying it had suffered due to a number of management changes since 2009. A stock clearance sale commenced shortly afterwards.
The fashion business, especially the high end and boutique apparel sectors, have been suffering this year.
Fashion Factory Clearance and Covers Design collapsed early in the year and more recently Grab Jeans, Belinda International and Bettina Liano also collapsed.
The rising dollar has pushed more buyers overseas and British retailer ASOS recently noted at the Online Retail Conference that Australia is now its second largest market outside Britain.
Experts believe that trend is set to continue as consumer sentiment remains weak and shoppers remain thrifty.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
Comments