Winning bidder for swimwear business was owner which placed it into administration
L Catterton, the private equity firm backed by Louis Vuitton Moët Hennessy, has won the bid to buy back the Seafolly swimwear business it placed into administration.
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Seafolly is set to be bought back by its private equity owner, which has been nominated by the administrator of the fallen swimwear brand as the preferred bidder.
Administrator Scott Langdon of restructuring firm KordaMentha on Monday said a bid from L Catterton Asia represented the best value for all creditors, including suppliers.
L Catterton, a private equity firm backed by French luxury fashion and apparel company Louis Vuitton Moët Hennessy, bought into Seafolly in 2014 and took full control in 2018.
It placed the label into voluntary administration in late June and has since emerged as its biggest creditor.
The move to sell Seafolly back to its owner is likely to anger other creditors who face heavy losses.
It echoes a similar transaction at rival Tigerlily, which was essentially bought back by its private equity owner after undergoing a significant restructure during an administration process that resulted in more than half its stores being closed.
Mr Langdon said the nomination of L Catterton followed a competitive sales process.
“I was overwhelmed by the level of interest and competition to own one of Australia’s most recognisable brands,” he said. “Seafolly will continue to be the iconic Australian beachwear brand that customers know and love.”
Mr Langdon said neither L Catterton nor its related parties would share any of the return to creditors from the sale.
“This increases the return to other creditors,” he said.
The preferred bid has been made through a deed of company arrangement.
Creditors will be asked to vote on the deed at a meeting to be held next Monday, although as L Catterton is a major creditor — and voter — the deal is set to be approved.
About 80 parties expressed an interest in buying Seafolly, which has been promoted by some of the nation’s best-known models such as Miranda Kerr, Shanina Shaik and Megan Gale.
More than a dozen bids were received and those bids were whittled to a final four.
Seafolly and Sunburn operated 44 stores across Australia — six in Victoria — and 12 overseas at the time of entering administration.
The label was also sold in about 2700 third-party stores in more than 40 nations.
Seafolly stores have stayed open but the administrator has closed the 15 Sunburn stores, including one in Victoria. Creditors have questioned Seafolly’s administrator about whether pushing for a quick sale is in their best interests given the coronavirus cloud hanging over the economy.
Mr Langdon has defended the speedy process, saying Seafolly had been haemorrhaging cash for quite some time.
Seafolly was launched from Bondi Beach in 1975.
It is headquartered in Sydney and employed 121 staff before being placed into administration.
MORE: FOUR BIDDERS FIGHT FOR SWIMWEAR BRAND