Grovedale-based Sketch and Etch goes into liquidation with $3.5m in debts

It was an award-winning business making custom neon signage and stationery and expanding overseas. It looked like things were booming. But Sketch and Etch came undone.

Ash Bent and Tash Craven of Sketch & Etch Creative. Photo: Hails and Shine

A once-thriving custom signs and stationery business in Grovedale, which expanded into the US market and won industry awards, has been forced into liquidation after amassing millions in debt.

Sketch and Etch, co-founded by Ashley Bent and Tash Craven in 2015, rapidly grew in both staff and revenue, only to face a financial collapse amid supply chain disruptions, economic challenges and overexpansion. The company made custom neon signs and stationery.

The business, now under liquidation, owes more than $3.5m to creditors, including substantial amounts to the ATO, suppliers and employees.

Ms Craven is currently listed as its sole director as Mr Bent’s tenure as director ceased in December 2022.

Rachael Burdett from Con Cordis, a business advisory firm, was appointed liquidator as a result of an order from the Supreme Court.

The director placed the company into voluntary administration on May 17, 2024 after application proceedings for winding up had already started.

The company also owed $230,037 in employee entitlements, which included wages, superannuation, annual leave and long service leave.

Ash Bent and Tash Craven of Sketch & Etch Creative. Photo: Hails and Shine

Mr Bent said the majority of money owed to unsecured creditors was a result of intercompany loans and that the company also owed half a million to a Chinese manufacturing company.

Mr Bent said in 2020 the company was facing dire circumstances as a result of Covid, however, after expanding their market to the US, the company experienced exponential growth in a short period of time.

In April 2020, the business rebranded and launched their website in the US.

The venture, which had 15 employees in 2020, had up to 100 staff in 2022.

“The business was pretty rapidly growing,” Mr Bent said.

“Profits were thrown back into the business just to grow, just to expand the team and expand our manufacturing capabilities.

“In 2022 we took on a venture from an investment capital fund and that further allowed us to expand into the US.

Sketch & Etch Creative. Photo: Hails and Shine

“We had then set up a manufacturing facility in Los Angeles”.

Mr Bent said the aim of the company was to grow and get market share and then look for efficiencies in the future, however, the business struggled to keep up with the company’s growth.

“That’s where you have a challenging period of time because that’s when you have all these orders come in that you have to get out.

“We then had challenges with the manufacturer, who wasn’t able to deliver the goods on time.

“When we have sales that happen out of the blue like that, we can’t scale the manufacturing really fast, so we rely on Chinese manufacturers to help us.

“It was kind of like a perfect storm. We had a bunch of refunds and were in a really challenging economic environment.”

Ms Burdett said it was her preliminary view that the company was likely to have become insolvent on June 30, 2022 and remained insolvent at all times until it was in the state of liquidation.

Sketch and Etch director Tash Craven. Picture: Mark Wilson.

The company incurred a loss of approximately $2.9m in the 2022 financial year and continued making a loss from then on.

Ms Burdett said the director advised that the business and related businesses overseas were adversely impacted by Covid and that there was a decline in demand for its product and a decline in ongoing support.

“The company’s operations decreased in size and activity within 12 months prior to liquidation,” the report states.

Also attributed to the company’s decline was the unfeasible growth expansion to Adelaide after venture capital funding ceased and poor financial performance of the company’s sole shareholder.

Sketch and Etch director Tash Craven. Picture: Mark Wilson

Ms Burdett attributed this to the company’s failure to increase operational costs and the decline in demand as well as related party transactions.

Ms Craven said the process of liquidation had been difficult.

“Nobody goes into business wanting to shut it down, especially not after 10 years,” Ms Craven said.

“I feel like we have been a really valued business in the community, we have won a lot of the Geelong business awards over the time and had a lot of involvement in the community.

“We have done a lot for our staff and for us to go out this way has been really heartbreaking.

“It’s been a perfect storm of things that have happened … we have been in an industry affected by Covid and economic circumstances.”

Mr Bent said every employee who was owed money was told they would be personally paid if they didn’t get their fair entitlement guarantee.

It is estimated that the liquidation will be completed in the next 12 months.

Originally published as Grovedale-based Sketch and Etch goes into liquidation with $3.5m in debts