Australian brand Jeanswest rescue deal floated as administrators struggle to lock in buyer

The director of iconic Australian brand Jeanswest has pitched an eleventh-hour offer to creditors as administrators struggle to find a buyer and the full picture of the brand’s unravelling is revealed.

The director of collapsed Australian fashion brand Jeanswest has put forward a rescue deal to creditors who may have to settle for just 2c on the dollar as administrators struggle to lock in a buyer.

It comes as new documents lodged with the corporate regulator reveal the extent of the iconic retailer’s financial struggles – which first entered administration in late March – with revenue nearly halving from $61m in FY22 to $34m year-to-date 2025.

Pitcher Partners administrators Lindsay Bainbridge, Andrew Yeo and David Vasudevan, who have been running an “aggressive” eight-week sale campaign, said more than $15.4m in sales were generated during their appointment.

The national campaign, run with Jeanswest’s management team and inventory specialists Gordon Brothers, was used to sell the company’s inventory via its existing online platform and retail stores.

“The sale campaign has been successfully completed and all of the company’s inventory was sold with the exception of some sample stock,” they said.

“The sample stock did not hold any value and was donated to some charities.”

The director of collapsed Australian fashion brand Jeanswest has put forward a rescue deal to creditors. Picture: Simon Bullard

All stores have since been shut down.

The retailer’s online sales appear to have been halted with a “coming soon” message on their website, telling customers to keep an eye on their social media for more updates.

Money raised from the sale campaign was used to pay off some employee entitlements, who were owed over $4m.

Estimated employee entitlements now sit at $1.8m.

“The sale campaign realised sufficient funds to pay employees their outstanding annual leave, leave loading and long service leave components,” Mr Bainbridge said.

The company’s total liabilities are now estimated to be $61.3m.

Jeanswest owes over $4.2m to trade creditors, $144,075 in payroll tax, $8.8m in lease liabilities, $20.8m to related unsecured creditors and more than $25.3m to its secured creditor.

Gift card holder claims, which were $775,834 at the time of the appointment, now sit at $6,672.

“During the sale campaign, gift card holders were able to redeem their vouchers up to 6 April 2025,” Mr Bainbridge said.

“Unfortunately, we could not extend the time frame as we were concerned about possible adverse impact on cash flow had all vouchers been redeemed.

“At this stage, a small quantum of gift card holders has lodged $6,672 in claims. The quantum may also increase as the records indicate that the total amount of gift cards was $775,844.

“We do not have records of all gift card holders, and some gift cards may have been held for a significant period.”

The company’s total liabilitiesare now estimated to be $61.3m. Picture: Gaye Gerard

The eleventh-hour offer to creditors, proposed by the company’s managing director George Yeung, will see employees paid in full.

Unsecured creditors are expected to receive up to 2c on the dollar, compared to nothing if the company was tipped into liquidation.

A total of $20,000 will be set aside to pay gift card holders.

But the administrators said if claims exceed $20,000, they will become unsecured creditors and will not be paid out in full.

“As at the date of this report, as we have only received claims of $6,672 to date, we expect that they will receive full dividends in a best-case scenario,” Mr Bainbridge said.

“However, if a large portion of gift card holders lodge claims, that number may exceed $20,000, then the $20,000 limit will apply and gift card holders will rank as participating unsecured creditors, and may receive a dividend less than 50 cents in the dollar.”

The company’s secured creditor, Jeanswest’s ultimate parent entity Harbour Guide, will receive up to 1.4c on the dollar under the deal.

Related party creditors, company Champion Glory and Mr Yeung, will not receive a dividend.

The deed fund will comprise of cash held by the administrators, debts due to the company, including security deposits and bonds, proceeds of sale of equipment, fittings and other assets that will be sold by the auctioneers, and tax refunds.

A total of $20,000 will be set aside to pay gift card holders. Picture: Jeanswest

Dividends will be paid firstly to the administrators, then to employees, gift card holders up to $20,000 and finally $250,000 worth to participating unsecured creditors.

Control of the company will revert back to the directors once the deal is executed.

Mr Bainbridge recommended the creditors to accept the deal and said they ran a real risk of receiving nothing if the company was placed into liquidation.

“It is our opinion that it is in creditors’ interests for the company to execute a DOCA and we are of the view that each class of creditors would receive a greater return in a DOCA than if the company was placed into liquidation,” he said.

Creditors are expected to meet later this week to vote on the offer.

It comes as the administrators revealed they were yet to lock in a buyer, with five interested parties ultimately failing to put in an offer.

The administrators conducted an expression of interest campaign for the sale and licencing options for Jeanswest’s intellectual property.

They said they had a significant number of enquiries from “well-respected retailers” but ultimately no offers were received.

“These parties signed non-disclosure agreements and were granted access to the data room,” Mr Bainbridge said.

They said they had a number of enquiries from “well-respected retailers” but ultimately no offers were received. Picture: Jeanswest

“Following their due diligence on the company’s affairs, no offers were received.

“The key feedback from these parties was that the individual stores were not generating any profit and, as a result, no value was attributed to the company’s intellectual property.

“This underscored the difficulty in operating in the current retail environment.”

Mr Bainbridge said director Mr Yeung attributed the company’s failure to high cost of operations and overall decrease in customer spending.

But the administrators said a large and unsustainable physical store network with increasing overhead costs, a low and below industry average for marketing spend to sale ratio, and cost cutting measures also led to its downfall.

“Many stores were underperforming and there was no proper strategy to address the deterioration in trade,” Mr Bainbridge said.

Financial records reveal Jeanswest’s gross profit plummeted from $37m in FY22 to $18.2m year-to-date March 2025.

Jeanswest’s gross profit plummeted from $37m in FY22 to $18.2m year-to-date March 2025. Picture: Supplied

“(Jeanswest’s) business model was heavily reliant on bricks-and-mortar retail, with online sales accounting for only approximately 12 per cent of total revenue in the 12 months prior to our appointment,” Mr Bainbridge said.

Established in 1972 in Perth, the Jeanswest brand has been trading in Australia for over 50 years and in New Zealand for nearly 30 years.

It has long been a mainstay in shopping centres and, more recently, has developed an online presence.

Harbour Guidance, a subsidiary of Hong Kong’s Harbour Guide which is controlled by billionaire Chun Fan Yeung, acquired Jeanswest in 2020 out of administration after it previously hit financial strife.

At the time of administration, Jeanswest employed 220 full-time, 155 part-time, and up to 307 casual employees.

The company operated 87 retail stores across Australia and had a distribution centre and head office located in Melbourne.

Originally published as Australian brand Jeanswest rescue deal floated as administrators struggle to lock in buyer