Expectations are mounting that Seafolly will be bought from its original owners after the popular swimwear brand fell into voluntary administration last week.
Market analysts believe administrators KordaMentha will find no shortage of buyers for the business, which is considered a strong brand that has suffered from the opening of too many stores.
But the theory is that the VA appointment could enable the retailer to exit leases and shrink its global footprint in a move that would considerably boost profitability.
Seafolly has a retail network of 44 stores throughout Australia and 12 overseas, and employed about 121 people locally.
It is 100 per cent-owned by French luxury goods retailer Luis Vuitton through its L.Catterton business, which outlaid $70m for the purchase in 2014.
The business was founded by Peter and Yvonne Halasin 1975 and capitalised on the lycra trend that followed in the 1980s.
Seafolly is considered to fit well in the portfolio of L.Catterton, which also counts the iconic outback boot and clothing outfitter RM Williams within its portfolio and is said to have deep pockets.
L Catteron last year hired Goldman Sachs to sell RM Williams for a lofty $500m, but the business is yet to be divested.
Other parties likely to be interested in Seafolly include private equity firms such as Allegro Funds Management or US buyers such as GAP.
A South African suitor could also be drawn.
Another theory is that Seafolly could be rescued by the Halas family because it is known to be passionate about the brand.
Seafolly was run by Brendan Santamaria. He had taken up the role from Pas Group, which has also entered voluntary administration. At Pas he ran the Designworks operation.
Rival swimwear brand Tigerlilly, which was founded by billionaire James Packer’s former wife Jodhi Meares, called in the administrators in March.
Other retailers to collapse recently include Harris Scarfe, Jeanswest, G-Star, Aussie Disposals, Ishka and Bardot.
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