Fashion retailer PAS Group enters administration

The company behind fashion labels Black Pepper, Review and Yarra Trail has been placed into voluntary administration.

PAS Group CEO Eric Morris in one of the company’s Review stores. Picture: David Geraghty

The tough retail conditions that have accelerated during the coronavirus pandemic have claimed another victim, with PAS Group placed into voluntary administration.

The ASX-listed PAS Group owns a portfolio of fashion brands including Black Pepper, Review and Yarra Trail, and has been struggling for years.

The move to voluntary administration was announced to the ASX on Friday. PAS Group’s board appointed PwC partners Stephen Longley, David McEvoy, and Martin Ford as voluntary Administrators.

“While the board is of the view that the company is solvent, given the issues as a result of unfavourable financial market conditions, the COVID-19 crisis and the challenges of restructuring in that environment, it felt that administration was the best way to affect change while protecting all stakeholders,” the company said.

“PAS Group enters voluntary administration with the strong desire to restructure the Group and allow it to continue operating strongly and sustainably into the future,” the company said in its ASX statement

PAS Group stores will continue to trade as normal, in-line with current local restrictions across Australia and New Zealand. All store credits and vouchers will be honoured, the statement said.

PAS Group chief executive Eric Morris said the decision was difficult but made with the interests of the group, shareholders, and employees in mind. It follows an announcement made last month that the company was pursuing restructuring options.

“The Australian retail sector was already facing significant challenges prior to the COVID-19 pandemic,” said Mr Morris.

“While the board is of the view that the company is solvent, given the issues as a result of unfavourable financial market conditions for retailers, the COVID-19 crisis, and the challenges of restructuring in that environment, it felt that administration was the best way to affect change while protecting all stakeholders.

“Against the backdrop of many retailers closing their doors, we have taken proactive action to put PAS Group in the best possible position to navigate through the pandemic and subsequent economic challenges.”

Mr Morris said that the company would be transparent and open with employees throughout the process.

“We know this is a challenging time for our employees and their wellbeing will continue to be at the front of our minds throughout the voluntary administration process,” said Mr Morris.

It has been a horror few years for the $320 billion retail sector with a spate of collapses. Retailers have been hard hit by the coronavirus pandemic and the economic downturn.

PAS Group’s second biggest shareholder, with a stake of 10.5 per cent, is the founder of internet company Dodo and owner of the Melbourne United basketball team, Larry Kestelman. Mr Kestelman refused to sell into a takeover by private equity for PAS Group five years ago.

Other retailers to collapse recently include housewares group Ishka, fashion retailer G-Star, department store Harris Scarfe, Jeanswest, Colette by Colette Hayman, Laura Ashley and Co-op Bookshop’s Curious Planet retail chain.

In the last few years other retailers to lurch into voluntary administration have included Roger David, Topshop, Rhodes & Beckett, Oroton, Maggie T, Payless Shoes, Toys R Us, Marcs, David Lawrence and Live Clothing.