This was published 9 years ago
Koko Black collapse 'out of the blue'
By Cara Waters
Luxury chocolate retailer Koko Black has collapsed with Deloitte Restructuring Services announcing on Wednesday that Sal Algeri and Glen Kanevsky have been appointed as joint voluntary administrators.
Koko Black will continue to trade as the administrators investigate the business.
Koko Black chocolates in the Royal Arcade, Melbourne. Credit: Craig Sillitoe
The chocolate business was founded in 2003 by Shane Hills with a single store in Melbourne's Royal Arcade but since then has expanded to 14 locations around Australia with shops in Sydney, Perth, Brisbane, Adelaide and Canberra.
Koko Black manufactures in the Melbourne suburb of Coburg and employs about 300 people.
Shane Hills, founder of Koko Black chocolates, in the kitchen of his Templestowe home this year. Credit: Luis Ascui
Last year the chocolate business was awarded a $3 million grant by the Victorian state government for it to undertake a $10.9 million project to establish an "Alchemy Hall Project" which was slated to include a manufacturing centre of excellence, a research and development facility to support product innovation and an interactive visitor experience centre and salon.
Koko Black also recently expanded to New Zealand, but the New Zealand operations are not affected by the collapse.
Algeri says Koko Black is the victim of its ambitious plans.
"The business expanded very rapidly and undertook a series of major projects over the past 18 months," he says. "In combination, the level of activity was beyond the resources of the business."
Algeri says Deloitte's appointment will have no impact on Koko Black's operations.
"It's important that customers, suppliers and employees understand that it's business as usual," he says.
"Christmas is historically the strongest trading period of the year and we urge everyone to support the business during this time."
The administrators will be examining all options to recapitalise and restructure Koko Black "with a view to underpinning its future viability and growth".
Christmas is historically the strongest trading period of the year and we urge everyone to support the business during this time.
Sal Algeri, voluntary administrator
Patrick Coghlan, commercial director at CreditorWatch, says there was no adverse information about Koko Black before the collapse with no court judgments or payment defaults "which indicates that it has come out of the blue".
"There were a number of inquiries over the last month or so indicating that suppliers were looking them up just to do a bit of a review," he says.
Coghlan says the current retail environment may also have taken its toll on Koko Black.
"General retail conditions are not amazing and for something as boutique and niche as what Koko Black is selling it's tough," he says.
A first meeting of creditors will take place on Thursday next week.