A retail chain founded by the former owner of adventure apparel giant Kathmandu, has run into trouble, with administrators appointed to decide its future.
Discount variety retailer Retail Adventures, founded by entrepreneur Jan Cameron, was once one of the biggest retail chains in Australia, reportedly bringing in around $1 billion dollars in revenue a year and spanning 25 categories, including apparel.
The privately owned Australian company has struggled to stay afloat amidst significant losses and, following a failed restructure, has now had Deloitte Restructuring Services partners Vaughan Strawbridge, David Lombe and John Greig appointed as joint voluntary administrators.
The partners will sort through the company's affairs, which includes around 270 stores across four brands nationally – Crazy Clark’s, Sam’s Warehouse, Go-Lo and Chickenfeed.
However, Strawbridge has revealed that a licence agreement is in place between Retail Adventures Pty Ltd and DSG Holdings Australia Pty Ltd for them to manage the 238 Crazy Clark’s and Sam’s Warehouse stores.
“Retail Adventures has tried to restructure, but due to the cost of achieving this and time pressures, this has not been possible,” he said.
“The licence arrangement is designed to allow the Crazy Clark’s and Sam’s Warehouse stores to continue to trade under a new management structure. Around 5,000 people are employed in these stores and this is considered the best way to ensure their viability and to preserve the value of the business and jobs.”
Strawbridge said the group will immediately begin a detailed review of the financial position of the company and, as part of this, will review the performance of the 32 remaining Crazy Clark’s, Go-Lo and Chickenfeed stores.
However, he said that the stores are trading at significant losses and closures would be “inevitable”.
“Employees are being advised of developments and will be offered support as needed. We will also be contacting creditors and other stakeholders regarding the situation.
“Going forward, the focus will be on maintaining value in the business for the benefit of all creditors.”