Major shareholder set to buy struggling Aussie luxury handbag brand Oroton

GOOD news, fashion lovers: The struggling Australian luxury handbag brand Oroton has been saved from the brink of collapse.

IT seemed luxury Aussie handbag retailer Oroton was doomed last month after it went into voluntary administration.

Today, it has risen from the ashes following a takeover bid from a major shareholder.

Caledonia Funds Management chief investment officer Will Vicars, who owns 18 per cent of the 79-year-old company’s ASX-listed shares, will buy the brand from administrators Deloitte.

Mr Vicars will take control from the Lane family, which founded the company in 1938.

The move means the embattled brand will now be able to continue operating.

According to The Australian, the deal ensures Oroton will avoid a breakup of the business and allow local and international Oroton stores to keep trading.

“Importantly the proposal would allow Oroton Group to remain trading and avoid a breakup of the business to the detriment of employees, creditors and other stakeholders, and seeks to ensure a strong and stable future for the company and its stakeholders,’’ Deloitte said in a statement to the Australian Securities Exchange.

Voluntary administrator Vaughan Strawbridge said Deloitte’s objective had been to “avoid a breakup or closure of Oroton” and “preserve employment and as much of the Oroton business as is viable”.

“Entering into this agreement is an important first step in implementing a recapitalisation of Oroton and we will work hard to complete the proposal,” Mr Strawbridge said.

So far, no details regarding the value of the deal or how much creditors will receive have been revealed.

Just yesterday, The Daily Telegraph reported that Oroton had faced a fresh setback in the form of a warehouse glitch which forced the company to make online refunds.

Oroton had told some customers orders made before the voluntary administration announcement couldn’t be honoured due to “a warehouse move and a lack of stock”.

However, the brand was still processing online sales for products that were actually out of stock.

While the company emailed customers to say they would be refunded, it advised certain items “may have since been restocked” and to lodge a reorder — although delivery couldn’t be guaranteed.

The brand went into voluntary administration in late November, sparking an immediate rush of sales from shoppers keen on bagging a bargain.

But the site could not handle the increased demand and crashed, displaying an error message.

Aussie actor Rose Byrne was the most recent face of Oroton, although in March this year it was announced the star would be replaced by “younger” — and presumably less costly — influencers. The brand had reported a loss of $14.2 million for the year to July 29.

Oroton’s woes followed the recent collapse of other big-name retailers including Topshop and Topman Australia, Marcs, David Lawrence, Herringbone, Rhodes & Beckett, Pumpkin Patch and Payless Shoes, while Speciality Fashion Group, whose stable of brands includes Katies, Millers and Rivers is in the process of closing more than 300 stores.

[e-mail]