Outland Denim enters business restructuring process after ATO calls in $500,000 Covid debt

A Gold Coast sustainable fashion brand – made famous by Duchess Meghan Markle and favoured by movie stars – has called in administrators. Find out what it means.

A Gold Coast sustainable fashion brand – made famous by Duchess Meghan Markle and favoured by movie stars – has called in administrators.

Restructuring practitioners were appointed to Outland Denim on February 29, less than five months after it bought the assets of flailing Sydney brand Nobody Denim for an undisclosed sum.

Outland was founded by Mount Tamborine local James Bartle, who created it in 2011 with the goal of empowering women in developing countries.

It made global headlines in 2018 after Ms Markle wore a pair of their jeans, sparking a 3000 per cent spike in traffic on its website.

The interest super-charged the company’s expansion, enabling them to employ new seamstresses, most of whom had previously been victims of sex trafficking or forced labour, at their factory in Cambodia.

Leonardo DiCaprio wearing Outland denim jeans and jacket while promoting a film with Brad Pitt.

Meghan Markle wearing Outland Denim jeans.

Outland is directed by Mr Bartle and Chinchilla cotton farmer Malcolm Valler, while its investors are mostly family members of the founder and everyday Gold Coast locals.

The share register also has heavy hitters including former coal mining executive Dennis Brown-Kenyon and Randall Seymore, president of US automotive giant Penske.

Restructuring practitioners can only be appointed to companies when directors decide they are insolvent, or likely to become insolvent. The move is only allowed for companies with debts under $1 million.

Restructuring practitioner James Robba said he was still waiting to hear from the ATO and other creditors about how much was owed, but early estimates had the debt around $500,000.

James and Erica Bartle at their Outland Denim office in Mt Tamborine. Picture: Luke Marsden.

Mr Bartle said the debt had mounted after Outland’s US launch was thwarted by the pandemic.

“We had put our product on the shelves at Nordstroms and Bloomingdales, and when Covid happened, and we lost 80 per cent of our business,” he said.

“People weren’t buying denim while they were at home taking meetings, they were buying athleisure and adventure gear.

“During Covid we accumulated an ATO debt - and they’re being a bulldog at the moment and going after everyone, so we had no choice but to enter this restructuring – we were put against the wall.”

James Bartle, of Outland Denim, discusses a pair of jeans being made in Cambodia. Pic: Sam Jam.

Mr Bartle said he was grateful the restructuring process existed as an alternative to wind-up or liquidation, although it had been “uncomfortable”.

“I’d like to see the ATO back off, because so many small businesses are going under,” he said.

“We’re watching lots of Australia fashion brands go into administration.

“When the economy does get back on track, there’s going to be other problems.”

James and Erica Bartle of Outland Denim in Cambodia where they employ local women. Pic: Sam Jam.

The company and its administrator will now formulate a proposal for creditors including the tax office, with a view to settling the debts.

Despite the setback, Mr Bartle has stayed optimistic and the company has just relaunched back into the US.

“We’ve done everything the right way, had good advice and managed our debt levels well,” he said.

“We’ll come out of this stronger but my fear for the Australian fashion space is that there will be many that are not as lucky as us.

“The big businesses will get bigger and the small ones will just die.”

Originally published as Outland Denim enters business restructuring process after ATO calls in $500,000 Covid debt