Kirrily Johnston in voluntary administration

AFTER 12 years, designer Kirrily Johnston has been forced to quit the business, revealing the truly dire state of the industry.

Kirrily Johnston

AFTER 12 years in the Aussie fashion business, renowned and innovative designer Kirrily Johnston has gone into voluntary administration.

The designer – favoured by the cool-school fashion set - says she has done so to ensure that her debtors receive the best possible outcome.

Johnston has two of her own stores in Sydney, one in Melbourne and is sold in David Jones and more than 70 boutiques nationally as well as having her own online store.

"I know everyone will be asking how could this happen when I seemed to be doing so well," says Ms Johnston.

“Unfortunately for me it was a culmination of GFC issues and manufacturing bad luck which tipped the business over the edge.

"I could have traded on and maybe pulled myself out of this awful situation but I did not want to take the risk and keep raking up debts that I may not be able to repay. I wanted to do the honourable thing, as it's not just my business and life but other people's lives as well that this situation will affect.”

The high Australian dollar also took a major toll on Ms Johnston’s international sales which had been growing steadily since she started her business in 1999. 

"With retail stores really suffering because of the amount of sales they are losing to online purchases, many boutiques treat local wholesale orders as if they are trading on consignment,"‘she added.

“This situation makes running a business almost impossible when you have paid for those products up front every step of the way. Also, the boutiques who sell our collection are dropping off like flies on a weekly basis as everyone in retail is struggling."

Johnston said high rents and the cost of manufacturing some of her products in Australia posed an ever increasing expensive uphill battle. 

"I had one rent hike of 25 per cent which I had no choice but to accept," she said.

Two manufacturing disasters also led to a loss of hundreds of thousands of dollars when her shoe manufacturer and fabric supplier would not accept any responsibility for producing faulty goods or return the payment for the goods which were paid for upfront. 

With no backer, Johnston is not sure what her immediate future holds but insists she is still completely in love with her brand and will never lose her desire to design.  

Ms Johnston’s situation comes hot on the heels of fashion perennial, Lisa Ho, who was forced to close her business just a few weeks ago