Fashion retail group Cue Clothing Co's fall into voluntary administration and receivership this week followed an FY25 set of financial accounts, lodged with ASIC, that carries a going concern qualification and a rare auditor scope limitation. The accounts, covering the 52 weeks to June 29, 2025, were signed off on April 29, 2026 – a little over four months before the September 2026 appointment of administrators and receivers.
Read alongside Cue's own 2025 Modern Slavery Statement, the two documents give a fuller picture of the business in its last full financial year: a group still trading at a loss despite rising sales, financed through related-party debt with tight covenants, and – for a brand long associated with local manufacturing heritage – one whose garment production is now stated to be entirely offshore.
Sales up, but the losses keep coming
Cue & Co Pty Ltd – the official name of Cue Clothing in the FY25 report – and its controlled entities reported sales income of $103.18 million for FY25, up from $98.06 million the year before. Gross profit improved to $51.74 million from $45.9 million.
Despite that, the Group posted a net loss of $5,075,813 for the year — an improvement on FY24's $14,150,113 loss.
Occupancy expenses came to $13.73 million for the year, against total future lease commitments of $45.79 million on the books at year end. A report from the Australian Financial Review today shared that Cue was put on notice by multiple landlords and suppliers for missed payments since June this year.
The Group's net liabilities by FY25 end stood at $3,063,228, close to the $3,311,935 of net liabilities recorded twelve months earlier. Accumulated losses grew to $8,470,464 from $3,394,651, a movement tied in part to a restructure under common control that ran through the accounts during the year (detailed below).
Total liabilities of $59.8 million against total assets of $56.7 million left the Group in negative equity for a second consecutive year.
The going concern warning
Note 1 to the accounts states the report has been prepared "on a going concern basis," built on cash flow forecasts covering at least twelve months from the signing date, and ties that basis to continued access to external funding:
"Subsequent to year end, the Group entered into an amended funding agreement with HUK 156 Limited, which extends the maturity of the existing working capital facility to July 2027 and revises certain borrowing capacity terms. The cash flow forecasts assume continued access to this facility and compliance with the revised borrowing base parameters."
Auditor Pitcher Partners included a formal material uncertainty paragraph in its report. Partner K L Byrne wrote:
"We draw attention to Note 1 in the financial report, which discloses that the Group incurred a net loss of $5,075,813 and the total liabilities exceeded total assets by $3,063,228 for the year ended 29 June 2025 and, as at that date, certain conditions exist... [that] indicate the existence of a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern."
Separately from the going concern note, Pitcher Partners issued a qualified opinion because it could not verify opening inventory. The firm was appointed auditor on June 24, 2025, after the Group's restructure on February 23, 2025, and so did not observe the physical stocktake taken at that date:
"We were appointed as auditors of the Group on the 24 June 2025 and thus did not observe the counting of the physical inventories at the date of restructure on the 23 February 2025. We were unable to satisfy ourselves by alternative means concerning inventory quantities held at this date. Since opening inventories enter into the determination of the financial performance and cash flows of the Group, we were unable to determine whether adjustments might have been necessary in respect of the income for the year reported."
A group formed mid-year
The "Cue & Co Pty Ltd" consolidated group is recent. On 23 February 2025, Cue & Co Pty Ltd acquired 100 per cent of Cue NZ Pty Ltd and Cue International (NZ) Pty Ltd, along with certain assets from related entity Cue Design Pty Ltd. Because the entities were under common control, the transaction did not meet the definition of a business combination under AASB 3. It was accounted for using the predecessor value method, with the difference between net assets and equity recorded in a new Common Control Reserve of $5,382,691.
Cue's own 2025 Modern Slavery Statement describes the same change from the operating side:
"In April 2025, the business and subsidiary companies previously operating under the name Cue Clothing Co underwent a change of ownership and were sold to a new Owner within the entity, Cue & Co Pty Ltd."
The statement notes that references to "Cue Clothing Co" in its reporting relate to the period before that sale, and references to "Cue & Co Pty Ltd" to the period after it.
Directorships also changed over the same period. Rod Levis resigned as director on April 1, 2025. Michael Calder was appointed the same day and resigned on July 18, 2025. Eric Morris, then chairman of Cue & Co, signed both the directors' report and directors' declaration, dated April 29, 2026.
The financing structure
Two related-party loan facilities, both dated April 11, 2025, make up the bulk of the Group's borrowings, totalling more than $22.4 million combined.
A $2,088,775 current facility from HUK 156 Limited carries interest at 8 per cent plus the RBA cash rate and a covenant tying quarterly capital expenditure to an agreed threshold. Originally due April 2026, its maturity is the one extended to July 2027 in the going concern note. A $20,350,685 non-current facility from HUK 155 Limited carries interest of 8 per cent plus a 4 per cent default penalty, a covenant barring distributions until at least $20 million in aggregate prepayments have been made, and runs to March 2035.
The accounts don't name Hilco Capital directly; media coverage of the September 2026 administration has separately identified Hilco, a UK-based turnaround specialist, as the company's owner since April 2025 and the party that withdrew funding.
Related-party payables fell from $22.86 million in FY24 to zero in FY25, and total payables fell from $26.1 million to $8.67 million. The Group also recorded a $16,121,961 gain on debt forgiveness within other revenue for the year — the accounts don't specify whether the two are connected.
Manufacturing: design in Sydney, production offshore
The 2025 Modern Slavery Statement gives a more granular account of where Cue's products are actually made than the financial accounts do.
The design work remains onshore: "Each Cue & Co Pty Ltd. Style for both Cue and the Veronika Maine brand is crafted in our Sydney studio. Our skilled in-house team handles all aspects of sourcing, design, patternmaking and sampling."
Production, however, is now fully offshore. The statement breaks down offshore manufacturing markets as China (15 suppliers, 61 per cent of production), Vietnam (2 suppliers, 38 per cent of production) and India (2 suppliers, 1 per cent of production volume) — a combined 100 per cent of the stated production tiers.
Separately, fabric sourcing is broken down by country of origin as China (72 per cent), Korea (15 per cent) and Turkey (7 per cent), with smaller volumes sourced from France, Japan, India, Italy, and Vietnam.
Less than two years ago, Cue Clothing was considered one of the largest fashion manufacturers in Australia, with factory partners in Sydney in addition to offshore suppliers.
On workforce, the Modern Slavery Statement states Cue & Co Pty Ltd employs 609 team members in total, including 91 at its Sydney headquarters and across 148 retail stores in Australia and New Zealand. It breaks the workforce down as 28 per cent full-time, 19 per cent part-time and 53 per cent casual. This differs from the 630 employees stated in the FY25 financial report lodged with ASIC; the accounts don't explain the discrepancy, and the two documents may reflect different measurement dates.
The FY25 accounts also record impairment losses of $1,178,412 against furniture, fixtures and fittings and $916,059 against lease assets during the year. The Group's auditor also changed during the reporting period, from Ernst & Young (FY24 audit and related fees of $94,308) to Pitcher Partners (FY25 fees of $158,450).
FY25 numbers at a glance
Sales: $103,176,839 (FY24: $98,062,273)
Net loss: $5,075,813 (FY24: $14,150,113)
Net liabilities: $3,063,228 (FY24: $3,311,935)
Accumulated losses: $8,470,464 (FY24: $3,394,651)
Employees: 630 (Form 388) / 609 (Modern Slavery Statement)
Retail stores: 148 (Australia and New Zealand, per Modern Slavery Statement, including concessions and outlets)
Total lease commitments: $45,792,112
Related-party loan facilities: $22,439,460 combined
Gain on debt forgiveness: $16,121,961