High end shoe retailer Sneakerboy failed twice in the space of six months - the last time for good

A bailout from multi-billion dollar UK sports retailer Frasers Group was not enough to save high end shoe retailer Sneakerboy.

Sneakerboy sold high end and collectable shoes.

High end shoe retailer Sneakerboy has the dubious distinction of failing twice in the space of six months after its multi-billion dollar UK acquirer bought the business then rapidly shuttered it again.

The Melbourne-based business, operated by directors Nelson Mair and Theo Poulakis, was placed in administration in July last year following the lodgement of more than 10 winding up applications against companies in the group over a period of three years.

Entities in the group, which once operated Sneakerboy outlets across Melbourne, Sydney and Brisbane, had racked up debts in the order of $17m, and left some customers fuming about unfulfilled orders for high end shoes from companies such as Balenciaga, Moncler and Adidas.

An update to creditors of Sneakerboy Retail, lodged with the corporate regulator recently, shows that a sale process announced last year for the business had been successful.

Administrator Stephen Dixon from Hamilton Murphy Advisory says in the report that he received 40 initial expressions of interest to buy the company, which were whittled down to four indicative offers.

“After conducting a review of the non-binding offers, I accepted an offer from Frasers Group Australia,’’ Mr Dixon says in his report.

“I advise that the Sneakerboy business and assets were sold on a going concern basis and settlement occurred on 29 September, 2022.

“The Sneakerboy business continued to trade pursuant to the control of the purchaser.’’

The purchase price was not disclosed, and Mr Dixon says in the report that the amount realised was paid to the first ranking secured creditor Octet Finance, and that “there were no funds or assets remaining to enable a distribution back to the remaining ... secured creditors of the companies.’’

Mr Dixon says in his report that the directors out its failure down to the impact of the pandemic, however he appears to disagree.

“Based on my enquiries to date, l am of the opinion that the company’s failure can be attributed to a deficiency of working capital, poor financial control and poor strategic management of business,’’ he says.

Sneakerboy was bought by the £3.65bn London Stock Exchange-listed Frasers Group, best known for its Sports Connect brand. However the resurrection was short-lived.

Less than seven weeks after buying Sneakerboy on September 22, the new entity, Frasers Group Australia, was itself placed in administration after a key supplier agreement was terminated.

“Following an inability to procure agreement on continued supply of goods with a critical supplier, the parent company determined that the Australian business was no longer viable,’’ a report from administrator Marcus Ayres of Kroll says.

“It determined that it would no longer provide financial support as a consequence and would pursue a winding down strategy.’’

The administrator says it believes the company did not trade while insolvent during its short life.

“The company acquired the Sneakerboy business on 23 September 2022, and effectively traded for less than seven weeks before appointing us as voluntary administrators,’’ Mr Ayres says.

“Given the relatively short period of the company’s operations, financial statements were not readily available at the time of our appointment.

“In any event, all expenses were met by either the parent company or the former administrator of the former Sneakerboy Group via licence agreements established prior to our appointment.’’

Sneakerboy had 39 employees including 17 full time staff and 22 casuals when Mr Ayres was appointed.

Creditors’ claims in the second matter amounted to $2.8m, however the main debt owed by the company was to parent company Frasers Group as a result of a loan.

Staff entitlements of $349,237 were also claimed.

Under the deed of company arrangement proposed by the administrator, and accepted by creditors, they were all paid out in full, and the business has now been shut down entirely.

The Sneakerboy website is now non-operational and redirects to 18Montrose, which is part of Frasers Group.