Embattled accessories retailer Oroton has announced it has entered into a binding agreement with Gap Inc to discontinue the Gap franchise business in Australia.
The decision follows news that the company had been granted a six-month extension of a $35 million finance package.
Oroton has stated that all six stores under the Gap brand will close by January 31, 2018.
The brand has also said it is exploring further strategic options which may include the sale, recapitalisation or refinancing of debt facilities.
However, there is no certainty that this process will result in a proposal or transaction for OrotonGroup.
OrotonGroup CEO Ross Lane thanked the Australian Gap team, acknowledging its continued efforts during a trialling financial period.
“The Board and I thank the entire Gap Australia and Gap Inc. team for their dedication and substantial efforts to develop the Gap business in Australia over recent years.
"OrotonGroup also acknowledges the support and cooperation that it has received from Gap Inc. in amending existing arrangements.”
The company stated that while this decision, combined with its earlier extension, will allow it to maximise value for the company and its stakeholders, it was too early to quantify the financial impact.