The company behind the well-known womenswear chain, Barkins, has officially gone into liquidation and it is 'unlikely' that any creditors or staff will be repaid, according to administrators.
BEM Corporation, which owes about $1.9 million to secured creditors, $5.9 million to unsecured creditors and $925,000 to staff, went into liquidation following a third meeting of creditors this week.
BEM, which traded as womenswear chain Barkins, ran into trouble with debt last year and Manfred and Justin Holzman, of Holzman Associates, were appointed administrators in November 2011.
“We will now proceed to wind up the company as it has been place into liquidation,” Manfred said. “The company has sold its stock and assets and there are unfortunately employees who are owed a lot of money - and creditors, but it is unlikely that anything will be available to any of them.”
Holzman said the brand originally had about 30 stores, 14 were sold in October and staff were kept on, but about 113 employees are still owed money from redundancy, long service, wages and superannuation.
Of the 14 stores seven were taken over by Melbourne-based company Frat House. The other seven were bought by two separate companies who plan on breaking away from trading as Barkins as soon as the current stock runs out.
A spokesman from Frat House, which is best known for stocking American clothing brands such as Abercrombie and Fitch, said one of the seven stores will soon close, but a new location will be sort.
As exclusively reported in the February edition of Ragtrader, BEM Corporation owes a string of suppliers, such as PSS Clothing and Geoffrey Susskind, over a million dollars each.