Monarch Tattoo Studio Sydney: Why long-term operator has been placed in liquidation

The long-term operator of a Sydney tattoo studio has blamed government policies for ‘killing small businesses’ after her company was placed into liquidation this month.

The long-term operator of a Sydney tattoo studio has blamed government economic policies for “killing small businesses” after her company was placed into liquidation this month.

Liquidators have been appointed to the company operating as Monarch Tattoo Studio which has traded out of a leased studio on Clarence St in the CBD for the last decade.

Joint liquidator Liam Bellamy of RRI Advisory said the business – which has more than 38,000 online Instagram followers – advised it had struggled with poor economic conditions including those stemming from the Covid-19 pandemic.

“This has arisen as a result of a fall in customers due to people working from home and an overall decrease in foot traffic in the city,” Mr Bellamy said.

The Daily Telegraph understands a new operator has taken over the Monarch Tattoo Studio in the CBD and the studio is now trading under a new entity. Monarch Tattoo Studio also operates a Liverpool studio which remains trading and open.

Liquidators were appointed to the business last week.

Joyce Deang, who operated the CBD store for the last decade, said it was becoming increasingly hard for small businesses to navigate increasingly tough economic conditions.

“It’s very hard to own a small business because with interest rates increasing people are prioritising their mortgages and don’t have a lot of money left over for other spending,” she said.

“A lot of retailers in the CBD are also relying on foot traffic which is down and when you add in rent and insurance which are ridiculous for tattoo studios and increase every year it becomes impossible.”

The business has operated on Clarence St in the CBD.

Mr Bellamy said an initial investigation into the business’s finances indicated it owed an ATO debt which he said was a “common reason we are identifying in businesses that we have been appointed to”.

“The appointment of liquidators is primarily being driven by the ATO pursuing the outstanding Covid tax debts, which they are using the Director Penalty Notice Regime to force business to either repay the debts or enter into liquidation,” he said.

Mr Bellamy said about $370,000 is owed to creditors including nine unsecured creditors, the ATO and an employee creditor.

Ms Deang believes the Federal Government was making it challenging for small businesses to survive the current economic climate.

“I feel as though the government put us in this position because of their policies but if interest rates were normal and people could afford to spend then we wouldn’t be in the position we’re in,” she said.

“As a business owner you’re stuck between a cycle of owning debt to the people making life more difficult for you.

“For me I couldn’t keep hoping it would improve.”.

Figures released by ASIC in April show the number of Australian companies failing has soared over the last year with 7742 companies entering external administration from July 2023 to March 2024 – a 36 per cent increase on the previous nine month period.