Independent retailers defaulting on payments played a role in the collapse of womenswear label State of Georgia.
Designer Georgia Hall voluntarily appointed liquidators to wind up the company late last month, with unsecured creditors owed close to $264, 000 and assets totalling just $30,000.
Hall said tough economic conditions had a dramatic impact on the company’s cash flow and its ability to move forward with future collections.
“The last 12 months have been extremely difficult for fashion retailers due to the global financial crisis,” she said. “The majority of our stockists are small independent boutique fashion retailers who were hardest hit by the financial crisis. We were unfortunately caught up in a situation where a number of stores defaulted on payments or in some cases closed down.”
The designer said she intended to fulfil retail orders for her spring/summer 2009/10 collection.
“We had such a fantastic response to the range; however we have been extremely cautious of who we can sell to as well as what we can actually afford to produce.”
In a move that might anger unsecured trade creditors, Hall said she intended to relaunch the company with funds generated from its recently opened boutique in Bali.
“This will hopefully be one of the ways of keeping cash flow going – I would really like to open other retail stores in Australia in the future.”
Retail stockists for State Of Georgia, however, have shown their overwhelming support for the young designer. Annette Verrusio, who operates Sydney boutique Paris Texas and fashion agency Doll Face Fashion, said new generation labels had been hit hard by the economic crisis.
“There are retailers out there that owe these designers tens of thousands of dollars,” she said, adding her agency had set up an online system to better track and manage orders. “Those bad retailers ruin it for the rest of us.”
State of Georgia is stocked at independent boutiques across Australia and select Myer department stores.