Urban Stores administration shock

SYDNEY: Retail chain Urban Store has gone into voluntary administration, leaving its suppliers little chance of recouping the "significant" funds they are owed.
The Burwood-headquartered retailer - which has eight stores across Sydney -appointed administration firm Lawler Partners to help run the business earlier this month after finding itself unable to meet its financial obligations.
Lawler principal Tony Lawler confirmed administrators Robert Whitton and John Vouris were appointed to take control of the privately-owned business on February 5.

A spokeswomen for Urban Stores co-owner Garry Herro said Herro was likely to be in "meetings all week" and would not be available for comment. However, in a tightly-worded email to suppliers obtained by Ragtrader, Urban co-owner Garry Herro said the decision to call in the receivers had not been an easy one.
The email said Herro deeply regretted taking this course of action and concluded with him apologising for the "inconvenience" it had caused.

Speaking just hours after the appointment Lawler said Urban Stores - which had a combined turnover of around $10 million per annum - would continue to trade and had already been put up for sale as a going concern.
He said around 30 parties had indicated an interest in purchasing the company, however at the time of press, an offer had yet to be tabled.

A creditors meeting was held last Monday (February 12) where it was announced that at the time the administrators were called in, the company had outstanding debts totalling around $1.7 million. A second creditors meeting will be held before March 02.

It is understood the list of secured and unsecured creditors is quite extensive with the Commonwealth Bank believed to be the worst off, owed more than $1.6 million.
The list of companies still owed money by Urban Stores and listed as unsecured creditors includes Adidas, Asics, Cooper Street Clothing, Globe International, Lacoste, Classic Sports and Icon Clothing with brands including Wheels & Doll Baby, Lee Jeans, Zanerobe, Wrangler, Industrie, Diesel and Effigy 4:9 affected by the decision.
Classic Sports director Tony Magnus, who admitted doing a considerable amount of business with the retailer through both the Classic and Top Heavy brands, said he was "substantially" out of pocket as a result of the collapse.
Magnus, who declined to reveal either the value of the Urban Store agreement nor the amount he was owed, said he had no idea the company had been on a downhill slide financially.

"[It was surprising] as one is not party to a company's financial position nor its costs. The stores were very well marketed, well stocked and appeared to be well patronised."
Magnus said he was not confident of recouping the money he was owed due to the high cost of engaging administrators and because it was not a "normal situation to receive much" when an administrator is appointed.
Despite this, Magnus remained sympathetic to the plight faced by Urban Stores management.
"We hate to see businesses where the owners are passionate about what they do have problems of this magnitude. One must never forget that often the directors of a company suffer much more than their business partners," he said.