Aussie retailer popular with A-list celebrities collapses into liquidation owing $35m

A prestige Australian fashion brand which boasted some major A-list celebrities like Taylor Swift among its customers has gone into liquidation.

A prestige Australian fashion brand has collapsed into liquidation and will stop trading after no white knight stepped out of the shadows to come and rescue it.

In May, the Australian arm of luxury apparel brand Dion Lee Enterprise went into voluntary administration after a major partner withdrew investment.

The eponymous Dion Lee, who is from Sydney but now resides in New York, founded the business in 2009 when he was just 23 by showcasing his collection at Australia Fashion Week.

The fashion label had gone on to dress the likes of A-list celebrities like Taylor Swift and Dua Lipa and had grown to have six stores in Australia and 160 outlets globally.

But the company’s accounts were less rosy; it had debts of $35 million owed to a number of creditors.

With no “acceptable” offers to buy the business, creditors voted to place the business into liquidation on Thursday night.

Its remaining stores will shut in late September or early October.

Antony Resnick and Henry Kwok of insolvency firm dVT Group, previously the administrators, have been appointed as liquidators.

Taylor Swift wearing a Dion Lee corset at this year’s Super Bowl. Picture: Ezra Shaw/Getty Images

“The second creditors meeting heard that while there had been interest from potential buyers of the brand no acceptable offer was as yet forthcoming,” the liquidators said in a statement to news.com.au.

In the three months that the business was operating under the administrators, they raked in more than $3 million in sales.

However, this was a fraction of what they should have been making and far less than what Dion Lee was generating at its peak.

Administrators had slashed the price of the merchandise in a clearance sale, selling some apparel for 80 per cent of its actual price.

Dion Lee collapses into liquidation owing $35m, five stores to close in September.

There are six stores in Australia at plush retail districts, like The Strand in Sydney, the Emporium in Melbourne and James Street in Brisbane.

The then administrator, now liquidator, Mr Resnick, said since taking over the business, he shut down a Dion Lee outlet in the David Jones at Sydney’s Elizabeth Street in the Sydney CBD.

Seven staff members were initially stood down in May but then in June, a few were re-employed. Several others have been terminated.

They are sadly set to be unemployed in a month’s time when all the stores close for good.

The insolvency practitioners also placed a “geolocation lock” on the Dion Lee website, so that Australians would be redirected to a clearance website while non Australians were passed on to the US side of the business which continues to operate unimpeded.

Do you know more/ have a similar story? Get in touch | [e-mail]

Australian fashion designer Dion Lee founded the business.

The bulk of the company’s $35 million debt is owed to secured creditors, meaning they will likely recover it all.

Of that, $29.1 million is owed to secured creditors.

The family behind Cue Clothing Co are owed a staggering $20 million.

Cue Clothing Co had been partnered with Dion Lee since 2013, and was a shareholder of the company, but withdrew from a long-running partnership agreement it had with the brand and recalled their investment.

An entity linked to Cue had loaned $20.3 million in working capital funding.

The Commonwealth Bank is the second largest creditor, owed more than $7 million.

[e-mail]

Originally published as Aussie retailer popular with A-list celebrities collapses into liquidation owing $35m