Jeanswest could be saved from collapse after a administrators found a buyer for the retail chain
A buyer has been secured for Jeanswest, which went into voluntary administrations last month, but the sale of the 106 stores is conditional. Here’s what the buyer wants.
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Jeanswest has secured a rescue package but the buyer — a former owner of the collapsed retail chain — has warned the deal is dependent on landlords cutting rents.
Administrator KPMG yesterday announced it had found a buyer for Jeanswest, which was put into voluntary administration last month.
Harbour Guidance, a company owned by Hong Kong apparel tycoon Yeung Chun Fan and his family, have now struck a deal to retake control of the chain.
Mr Yeung is a former Jeanswest director and his family investment vehicle, Howsea, was the retailer’s parent company when it was tipped into administration.
KPMG did not reveal the terms of the sale but a statement announcing the deal noted it was “conditional on landlords agreeing to revised lease terms”.
“This is a great result for all parties,” KPMG administrator James Stewart said.
“Retail is a people business and the administrators greatly appreciate the resilience of the Jeanswest staff through this administration process.”
Jeanswest had 146 stores and employed 988 people before it was put into voluntary administration mid last month.
KPMG announced late last month 37 stores, including nine in Victoria, would be closed, resulting in 263 job losses.
Harbour has agreed to buy a business spanning 106 stores, with 23 in Victoria, employing 680 workers.
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In all, one in four stores have been shut and one in three workers have lost their jobs.
It is unusual for a former business owner to retake control of a collapsed company but voluntary administration can allow failing operations to break lease obligations and restructure their business.
The process, however, can leave suppliers, landlords and employees out of pocket. Jeanswest collapsed owing creditors about $50 million.
Mr Stewart said employees would receive their entitlements from the proceeds of the administration process.
Secured creditors are set to receive a partial payment while unsecured creditors other than employees will not receive anything. They are owned about $10 million.
Harbour managing director George Yeung said the company planned to grow Jeanswest by harnessing both its bricks-and-mortar and online capabilities.
“The acquisition of the Jeanswest business will present an opportunity to rejuvenate this iconic brand well known to the Australian community,” he said.
Jeanswest opened its first store in Perth in 1972 and was taken over by a company linked to Mr Yeung in the 1990s.
A string of prominent retail chains have collapsed into administration or announced major restructures in recent months as difficult trading conditions buffet the industry.
They include Harris Scarfe, Dimmeys, Bardot, EB Games, Curious Planet, Bose and Colette by Colette Hayman.
Other fashion retailers to collapse of undergo major restructures during the past three years include Dimmeys, Debenhams, Roger David, Ed Harris, Marcs, David Lawrence, Herringbone, Rhodes & Beckett, Shoes of Prey and Payless Shoes.
Originally published as Jeanswest could be saved from collapse after a administrators found a buyer for the retail chain