Oroton looks to streamline operations
The move, expected to be announced by new chief executive officer Sally Macdonald to the market on Monday (March 26), is likely to see the ASX-listed brand announce that all seven stores in its Aspect retail portfolio will be sold to a private company already operating within the sector.
It is believed the deal is still undergoing due diligence with both parties subject to lengthy confidentiality agreements.
It is the second sale in as many months of a multi-branded retail chain following the collapse of Urban Stores late last month.
The sale, believed to be facilitated by veteran industry broker Rob Hartman, is the third significant divestment by the group in the past six months.
The first occurred when Oroton sold its poorly performing footwear brand Aldo to Busby Holdings in September. It then offloaded its loss-making brands Marcs and Morrissey to M Webster Holdings - the parent group of David Lawrence and Jigsaw - in November for $6.3 million.
In announcing a $9.4 million loss for the group - driven largely due to goodwill writedowns of around $11 million from Marcs and Morrissey - last October executive chairman Ross Lane announced plans by the group to focus all of its attention onto its two core brands, Oroton and Polo/Ralph Lauren.
Speaking at the time Lane said management had set aggressive targets to reduce costs and simplify its operating structure.
It is believed the winding down of the group's wholesale operations is being driven by plans to significantly ramp up its retail operations with plans to add a further 12 stores to its 28-strong chain of Oroton-branded stores.