Administrators of collapsed retail stalwart Blowes Menswear have revealed the details behind its demise.
The company behind iconic fashion retailer Blowes Menswear was officially placed into voluntary administration on July 24, 2013, with Paul Burges and Peter Krejci of BRI Ferrier appointed as administrators.
Brenstew, currently trades in five retail outlets located in Dubbo, Tamworth, and Armidale under the brands Blowes Menswear, The Wardrobe and URXs.
Commenting on the company's collapse, administrator Burges said the difficult trading environment in Australia and an untimely expansion of the brand's retail network are mostly to blame.
“The fundamental reason [for the administration] is that the director reached the point that he knew it was unsustainable in its current form and some format, external appointment had to be made.
“I think they also chose to expand at a time where that probably just wasn't the soundest strategy. They went across to establish a presence at Port Macquarie and that just didn't go well, frankly. It was real drain on the resources of the company, and consequently, it brought the rest down,” he said.
“They also had a crack at a pop-up store in an effort to do something creative and turn a bit of stock into cash and that exercise didn't go well either. To be honest – you don't really have to do that much wrong in retail at the moment for there to be dire consequences.”
Burges added that both the Port Macquarie and Chatswood operations have now been closed and the business and its assets are currently for sale as a going concern, with stock being sold at discounted prices through its remaining outlets.
He said the company has attracted “some level of interest already”, with approximately four parties having expressed interest to date. Burges said the process is still continuing and potential buyers to date still have to be vetted.
However, Burges said that despite the doom and gloom, the company may still have a future in the Australian retail market.
“The voluntary administration regime, is protective and a re-constructive measure, so it's not the end of the line – far from it. In fact, many businesses come out of administration stronger,” he said.
“The trading during our voluntary administration period has been quite sound. In particular Dubbo and Tamworth have been trading well. So if we can conjure up some sort of future for this group... I think that Dubbo and Tamworth would be the core of that restructured business.
“So the future of the business will be the sale of the business as a going concern, to some other party – or some form of restructure within a voluntary administration to take the company forward.
“There's good loyal support I think, from their customer base, and there's a good core of loyal staff – and the impact of that shouldn't be underestimated.”
The administration process and possible sale of the business is expected to take a few weeks, according to Burges.
Blowes Menswear was established in 1936 with the first Blowes Menswear store opened in 1992, followed by surf wear store URXS in 2003 and The Wardrobe in 2010.