Whispers grow Cue up for taking

The fashion industry in Australia is struggling. Picture: Dylan Robinson

Cue Clothing, which owns the Cue and Veronika Maine fashion brands, is being closely watched by opportunistic deal-makers in the fashion space, with mounting speculation the business may soon be placed on the market.

Owner Rod Levis is said to be contemplating selling. A sale in today’s retail space depends on whether a buyer exists that is prepared to pay a high enough price that makes it worthwhile.

The Cue Clothing Company was established in 1968 and a decade ago it was the largest local manufacturer of fashion in Australia.

Its brands include Veronika Maine, Cue and Dion Lee, and it counts Justin Levis, the son of Rod Levis, as a director.

Cue’s retail brand manager, Kate Bielenberg, told DataRoom that Mr Levis was very much at the helm of the company and “at no point” was a seller.

But market headwinds are said to be taking their toll on Cue, as is the case with most fashion retailers. Last week, the fast fashion youth brand Bardot entered voluntary administration amid the toughest retail trading conditions in decades.

KPMG was appointed voluntary administrator to the business that has 800 staff and 72 Australian stores and is owned and founded by Carol Skoufis.

Analysts say the company is likely to be the casualty of the high level of competition in the crowded fast fashion industry, where global giants such as H&M, Top Shop and Cotton On operate along with Australian discount department stores Kmart, Target and Big W.

One of the most logical suitors of Bardot is considered to be Alceon, which is a major shareholder of Mosaic Brands (formerly Noni B), although the company said it did not have an interest in Bardot.

The company has fallen into loss-making territory and is understood to owe between $20m and $50m to its lenders.