A multi-brand fashion house headquartered in South Australia has collapsed owing $10 million in liabilities.
This comes a month after Brent Kijurina and David Trim from Hall Chadwick were appointed as administrators of International Fashion Labels Pty Ltd (IFL), the local parent company of fashion brands such as Keepsake, Finders Keepers, The Fifth, C/MEO Collective and online retailer BNKR.
This is not the first time these brands have faced administration, having collapsed in early 2021.
According to the administrators’ report, obtained by Ragtrader through ASIC, the business collapsed owing $10.3 million in total liabilities, including $9.73 million to secured creditors and just over $600,000 to unsecured creditors.
The report added that no entitlements are owing to staff.
The highest secured creditor – being International Fashion Group Pty Ltd, IFL’s parent company – is owed $4.9 million. This is followed by $4.8 million in total liabilities owed across five other related parties.
Of the unsecured creditors, the Australian Taxation Office is owed the most at $460,742.43. Other unsecured debts include $8,500 to its BNKR subsidiary and around $20,000 to global forecasting firm WGSN.
According to the report, IFL director Toby Yap cited several reasons why the company faltered. This includes claims of significant supplier issues impacting the sourcing of stock, an increase in operating costs, poor management of supplier relationships, and an industry downturn due to geopolitical tensions between Australia and China, where suppliers are based. Yap also alleged there was mismanagement of the company’s assets by a former CEO.
The administrator added that his preliminary investigations into the affairs of the company also indicate that the failure may be attributed to poor strategic management of business, cancellation of wholesale orders due to supplier issues, trading losses resulting in insufficient working capital and liquidity constraints, and deteriorating working capital.
The latest accounts listed in the report show IFL went from earning $4.39 million in FY23 to just $221,057 in FY24, and reporting negative revenue of $118 in FY25. FY23 saw the largest operating loss of $3.54 million.
The reason for the drop in revenue is because the company paused its operations sometime in 2023 and has been inactive since.
According to administrators, the majority of the company’s income for the financial year to June 30, 2023 was derived from its main business operations of wholesale sales of clothing and accessories.
The administrators were also informed that the sum of $221,057 in FY24 was from an R&D tax incentive, which was brought forward from the prior year.
The cost of sales, which were $2.71 million in FY23, primarily consisted of costs of goods sold. This was a zero sum in FY24 and FY25.
IFL’s operating expenses, which were $5.27 million in FY23 and fell to just under $300,000 in FY24, primarily comprising wages and/or salaries, labour hire and advertising expenses.
“I have been advised that the expenses were high compared to sales, as the company had several cancelled wholesale orders due to late deliveries as a result of issues with factories and suppliers," the administrators wrote in the report.
“Operating expenses exceeded revenue, resulting in trading losses for financial years ending June 30, 2023, suggesting poor cost control and ongoing operational inefficiencies.”
Following their preliminary investigation, administrators also indicated possible breaches by IFL under the Corporations Act. This includes allegations of insolvent trading, which the administrators have tabled to the corporate watchdog ASIC.
A meeting is being held on Wednesday, August 5, with IFL director Yap tabling a deed of company arrangement (DOCA), in which unsecured creditors are expected to get 12.73 cents on the dollar. The administrators are recommending that creditors accept the DOCA proposal by Yap, as it gives a better return compared to a liquidation scenario, in which unsecured creditors would likely get nil.
IFL is also facing a winding-up application at the Federal Court of Australia, brought by the Deputy Commissioner of Taxation, with a hearing scheduled for August 6.
Ragtrader has reached out to the administrators to learn of the creditors meeting outcome.