Collapsed activewear label Stax was more than twice as far underwater as its own accounts showed, according to its liquidators.
In a report to creditors dated October 2, CasCap Advisory's Brian Silvia and Michael Hird put the company's deficiency at $22.82 million before liquidation costs. Its balance sheet at June 24, 2026 – or the day receivers were appointed – recorded a deficiency of $10.35 million.
The liquidators said the financial statements to June 24 "materially understated" the shortfall. The statement of affairs prepared at their appointment on July 10 already put the deficiency at $15.77 million at book value, rising to $21.26 million on estimated realisable values.
Two items drove much of the gap.
The first was stock. The June balance sheet recorded about $1.75 million more stock than a physical count found on hand, which came to $1.185 million. After talking with the company's former external accountant, the liquidators said they were concerned the monthly accounts had recorded the cost of goods sold only for sales through its online platform. In-store and other sales may not have been “picked up”, leaving stock overstated in the books.
The second was trade creditors, which the liquidators said were understated by $5.19 million. That figure included about $1.4 million owed to customers who had prepaid for garments through online platforms.
The deficiency measures how far Stax's debts exceed its assets. In July, the liquidators put its total liabilities at about $23.7 million.
According to the report, Stax appeared to book these as sales when it received the money, rather than recording a liability until the goods were delivered. The liquidators said a major sale in April and May 2026 had substantially increased the amount customers had prepaid.
Other adjustments included employee claims understated by $289,000, secured creditor debts understated by $270,000, about $99,000 in additional ATO liabilities, $499,000 of capitalised borrowing costs carried as an asset and, finally, $380,000 in online platform receivables that the liquidators said would never be collected, because the platforms have to refund customers who prepaid for stock that was never supplied.
The liquidators also said the reported loss of $693,000 for the 2026 financial year to June 24 was a material understatement. Stax last turned a profit in FY2022. It lost $9.12 million in FY2024 and has been balance sheet insolvent since at least June 30, 2024, the report said.
Despite the valuation problems, the liquidators said their findings to date supported the view that Stax "by and large" maintained proper books and records.
The collapse also left a large number of customers out of pocket. The liquidators said the company had about 12,000 creditors, including a substantial number of customers with unfulfilled orders.
The liquidators said they had tried to get a significant share of those orders delivered, to reduce the company's exposure to chargebacks. The plan failed because the billing platform most customers had used to prepay for garments was not prepared for this.
Stax's remaining stock, with a book value of $1.185 million, was mostly held at a third-party logistics warehouse in Western Sydney. The operator has sought to assert a lien over the stock for unpaid fees.
The director estimated the stock would realise about 25 cents in the dollar. The liquidators said the receivers were unable to resolve the lien claim, which limited their stock sales to leftover goods at Stax's Liverpool store.
The liquidators said a dividend to any class of creditor other than employees was unlikely.
The report also details a growing debt burden while the business kept losing money.
NAB was owed about $7 million, mainly through a trade finance facility used to import stock from China. Stax entered a forbearance agreement with the bank on September 24, 2025, under which FTI Consulting was appointed to monitor the company. NAB's lawyers told Stax it was in default of that arrangement on March 24, 2026, and again on May 7, May 27 and June 10. The bank appointed receivers on June 24.
Short-term lender Bizcap first lent to Stax on September 23, 2024. The $625,500 facility included $175,000 of capitalised interest and gave the company net funds of $422,751. The facility was refinanced four times. The final refinance, on February 10, 2026, was for $1,012,500. Of that, $210,495 settled the previous facility, $262,500 was capitalised interest and $45,309 was borrowing costs, leaving $493,746 in new funds.
Stax stopped meeting the weekly repayments of $28,125 on March 25, about six weeks later. Bizcap was owed $1.883 million when the liquidators were appointed.
Irish lender Wayflyer had financed Stax since 2020 through a facility repaid as a share of online sales. The liquidators said the debt grew to about $9.1 million, or about $10m with interest, under terms negotiated in December 2024. Weekly repayments of $198,795 rose to $286,167 after further facilities. The liquidators described that level of repayment as prohibitive for a company that kept making losses after June 2024. Wayflyer was owed $4.259 million at the winding up.
The director also held a $750,000 American Express credit card facility, which the liquidators said had been used to pay many creditor debts. It was at its limit by the time receivers were appointed.
Creditors will meet virtually on October 13 for the next steps.
Since the business collapsed, the assets of Stax were sold off to new owners. The new owners are the entrepreneurs behind Australian hype e-commerce marketplace Pushas, which has reportedly been scaled into an eight-figure business. The new investor group is independent of Pushas, which remains separately owned and operated.