Austin Group legacy ends

 

MELBOURNE: The final nail has been hammered into the coffin of Consolidated Capital Investments (CCI), formerly at the helm of one of the most influential wholesale groups in Australia.

PPB Advisory partner Warren White was officially appointed as liquidator of the company on December 17, with freshly released documents from the Australian Securities and Investments Commission (ASIC) revealing it was a court ordered appointment. White declined to comment on the circumstances behind the order and a liquidators’ report was not available at the time of press.

However, the news comes more than a year after the company’s main operating subsidiary Mercury Brands Group was placed into administration.

Mercury Brands, which formerly traded as the iconic wholesale business Austin Group, had endured consecutive financial year losses in the lead up to its collapse in September 2009. The group posted a record $11.4 million deficit for the 2009 financial year.

It is not known what impact the latest downfall will have on Australian Horizons Trading (AHT), which had an existing commercial agreement in place with CCI.

AHT purchased the assets of Mercury Brands when it collapsed, acquiring 20 brands including Rochford Australia, No Fear, Crusty Demons and French Kitty.

As part of the agreement, AHT was required to pay CCI a perpetual royalty of between two to five per cent on sales of these key brands and third- party licenses.

The royalties would be initially directed to unsecured creditors of Mercury Brands, with CCI set to receive any additional royalties after its trade debts had been cleared.

However, the matter has now been  further complicated by a change in ownership of AHT. As reported in Ragtrader in July 2010, AHT was purchased by Melbourne-based Playcorp for an undisclosed sum.

Headed by Steven Lew, son of retail powerbroker Solomen Lew, Playcorp reportedly draws estimated annual revenue of $220 million and operates across fashion, homewares and lifestyle.

Lew could not comment on whether Playcorp had inherited the royalty agreement between AHI and CCI when contacted by Ragtrader.

Lew could also not comment on the future of royalty payments to creditors or the circumstances surrounding CCI’s collapse.

“Confidentiality clauses do not permit us to discuss any arrangements pertaining to AHT and Playcorp,” he said.

Assia Benmedjdoub