SYDNEY: The economic crisis has claimed a number of fashion victims, but independent womenswear label Cohen et Sabine has bucked the trend and survived voluntary administration.
Designer Natalie Cohen appointed external administrator Adam Shepard in February this year, as cashflow problems and soaring overheads took its toll on the young label.
A private investment deal, continued orders and supportive suppliers saw the brand trade through its administration period. Its largest secured creditor, Scottish Pacific, continued to supply factoring facilities to the company.
Cohen et Sabine had two secured creditors at the time – the second being financial firm RAC – but the number of unsecured creditors was not revealed.
Cohen said voluntary administration became necessary due to a build up of issues that stretched the company beyond its financial limit.
“A number of our wholesale accounts were unable to meet their financial commitments to us, not able pay for stock ordered and delivered,” she said. “At the other end, we had concerned suppliers due to the financial crisis who suddenly changed terms, requiring full payment of product before delivery.”
Cohen said cashflow became constrained, with more retail clients requesting up to 120 days to pay for goods after delivery.
“I was faced with the same issues many creatives often are – being busy focusing on making the best product possible and in turn not having a holistic view over the business. In hindsight I lacked resources and struggled to manage the whole thing on my own.”
The insolvency group focused on rebuilding the business structure and appointed a new team to manage financial affairs.
“We really did not have a choice – some course of action had to be taken – so I have made damn sure we will never be in this position again,” she said.
Adam Shepard said fashion brands need supportive creditors who believe in the product to survive administration, as well as good fundamentals and a good brand presence. If a label cuts its margins too dramatically and ruins its brand reputation, it would be difficult to survive, he said.
In the six months since its voluntary administration, the label has released a spring/summer 2009/10 range, a resort line and a capsule collection for retail chain Sportsgirl. Winter 2010 will soon be ready for wholesale.
Cohen et Sabine was launched in 2000 and is stocked in around 50 boutiques and department store David Jones, which Cohen said was particularly supportive throughout the voluntary administration. It also supplies to Japan and New Zealand.