Herringbone adopts mea culpa approach

Corporatewear retailer Herringbone has emerged from its highly publicised collapse with a book's worth of "how not to" lessons.

German-headquartered shirting business van Laack GmbH purchased the company for an undisclosed sum earlier this month, after trade and bank debts totalling $13.8 million saw the company enter voluntary administration in December.

Herringbone founder John Mutton, who had been retained as managing director of the company, told Ragtrader he made no excuses over its collapse. At the time of press, Mutton was just days away from meeting van Laack executives at their headquarters in Germany to "better understand the engine room of [its] new parent company".

"Maybe you will read a 'how not to' book by me one day - the lessons are way too many," he said. "With a European parent company that is full of people the best in their industry - whether it be in the shop merchandising department or the accounting department - it will only have positive effects on the Herringbone brand and position us hopefully for a successful future."

It is understood van Laack negotiated the purchase through law firm Allens Arthur Robinson, which described the timing of the deal as "intense". Partner Steve Clifford said 37 local jobs had been retained as part of the transaction and Herringbone's debts had been eliminated.

"We negotiated a letter of intent over a three-day period when the client's CEO was initially in Australia, then two weeks of intensive due diligence and negotiation of the formal sale agreement, followed by closing approximately one week later."

However it is believed only secured debt had been wiped, with unsecured creditors telling Ragtrader they held little hope of recouping the money they were owned. One creditor told Ragtrader the company now looked to stabilise finances by slashing head office numbers and cutting expenses across the board.

While Mutton conceded "some" head office positions had been made redundant after the sale, he said there was no intention to rationalise numbers any further.

"Herringbone did rationalise some positions, however the commitment is to the future development of the Herringbone brand locally and overseas," he said. "As such, it is essential we retain and develop the brand DNA which my German colleagues and I both agree can only be done in Australia."

He said the partnership would mean new opportunities for expanding the Herringbone brand. This included bolstering the current number of retail stores in Australia - currently sitting at ten across New South Wales, Queensland and Victoria - and working with department store David Jones on bolstering the label.

"Van Laack also believes the world is ready for this Sydney brand. Coupled with the fact they already have a presence in the most premium departments stores throughout the world, it should be a relatively simple exercise getting the Herringbone brand in front of international department store buyers," Mutton said.

Van Laack has 51 stores across the world, including premium sties in New York's Madison Avenue and Paris fashion precinct Rue de La Paix, as well as department store accounts with Harrods in London and Takashimaya in Singapore.