NATIONAL: Ed Hardy Australia liquidators were still hopeful of a sale at the time of the companies’ administration, with minutes from the first creditors meeting revealing an interested party had stepped forward to obtain the license.
Ed Hardy Australia liquidators were still hopeful of a sale at the time of the company’s administration, with minutes from the first creditors meeting revealing an interested party had stepped forward to obtain the licence.
As exclusively reported by www.ragtrader.com.au, there were 13 creditors present at the meeting with secured claims totalling $9.3 million and total claims likely to rise to over $15 million.
Liquidator Simon Wallace-Smith said there were still “substantial” sums owed to unsecured creditors and a “significant” amount owed to employees, with the latter possibly having priority over the secured debt.
The company was placed into liquidation at a second creditors meeting earlier this month. Minutes from this were unavailable at the time of press.
At the time of its administration, Wallace-Smith advised creditors the director of Ed Hardy and Ed Hardy Operations, Gary Berman, had flown to America and that it was unknown when he would return.
He said the key to any sale of the business was the ability of an interested party to obtain a new licence from the American-based parent company. Wallace-Smith confirmed an interested party known to the US licensor has begun to undertake due diligence at the time.
Unaudited accounts revealed Ed Hardy Operations clocked in $17.5 million of sales for the year ended June 30, 2010.
However, the Australian operations, which included 10 stores and four department store concessions at the time of its administration, generated $1.9 million in net losses.
Wallace-Smith said the company was placed into administration after it had invested resources in overseas expansion opportunities.
This was not the only tension to erupt offshore, with administrators revealing they had been forced to deal with issues relating to the brand’s UK retail site.
Stock which had been purchased by the Australian company had been shipped to the UK, with the ownership of that stock under dispute at the time. A representative for creditor APC Logistics advised members of the meeting that $1 million worth of stock from the US was also pending clearance.
Ed Hardy Australia operated 18 stores at the height of its trade, including sites in Westfield which were shut down two months prior to the appointment of administrators. Retail and head office staff had also been rationalised in the lead up to the collapse.
Assia Benmedjdoub