Melbourne retailer launches major sale before it shuts down all its stores

A fashion company announced it was shutting its doors for good after 16 years in business, as Australia’s entire retail sector is savaged.

A Victorian fashion company has become the latest casualty in Australia’s struggling retail sector as it announced it was shutting its doors for good after 16 years in business.

Design A Space has three stores in Melbourne and stocked homemade jewellery, clothes and art from more than 170 independent designers across Australia.

Melbourne couple Bec and Chris Lutz launched the company in 2006 based on the premise to give predominantly regional businesses a chance to be stocked and sold in the heart of the Victorian capital.

But recently, the business owners revealed the company’s financial woes amid the current inflationary environment and announced Design A Space will cease to exist from July 15.

Between now and then, the retailer is selling its stock in clearance sales.

A staff member at the company told news.com.au that between five and six people will lose their jobs in mid-July when its stores in Fitzroy and the CBD shut down.

"Bec and I have made the decision to close down the stores on our terms and whilst we can still comfortably honour payments, wages, staff entitlements and outgoings," Mr Lutz said in a statement to news.com.au. 

"The RBA’s target inflation band of two to three per cent coupled with the government’s general message to stop consuming is having an extremely negative effect on discretionary spending and the economy," he said.

He added that thousands of smaller businesses had rented a space in his stores over the years. 

"We look after the selling for them and are encouraging all our loyal customers to visit the stores to support our designers at Design A Space one last time."

The company is selling all its stock until July 15 when it shuts its doors permanently.

In a social media post from several days ago, the retailer said with a “heavy heart” they were saying “goodbye” to their loyal customers.

“We have fought hard to keep the stores alive however, with the rise of costs in every aspect of our business it is no longer profitable to remain open,” Mr and Mrs Lutz wrote.

“The last three years have been extremely challenging for us as well as our incredible designers and with the current financial climate, it is proving very difficult,” they continued.

“We know so many of you have put your support behind Design A Space and for this we are very grateful.”

Although the company has an online presence, most of its sales come from brick-and-mortar sales, and so the entire entity will shut down come July 15.

The company has undergone a social media blitz advertising its wares in end of financial year sales.

It comes as a number of retailers have been left with little choice but to shut down as interest rate rises drives Australians to tighten their purse strings.

Design A Space has been an iconic part of Melbourne since 2006.

Retailers are dropping like flies in recent months amid the softening market.

Earlier this month, popular US shoe brand Rockport, which sold its products through Australian retailers including The Athlete’s Foot and David Jones, filed Chapter 11 bankruptcy proceedings.

Another popular shoe retailer, Bobux, went into receivership but was eventually bought out by another company.

In April, clothes seller EziBuy, which had an online presence across Australia and New Zealand, also went into voluntary administration.

The retailer had suffered a 51 per cent decline in sales from June to December last year.

Iconic music and entertainment retailer Sanity shut down all 50 of its stores across Australia at the end of March, as the pandemic took a toll on the business, although it continues operate in a digital space.

In February, Australian prestige clothes firm Alice McCall went into liquidation. News.com.au reported that the company owes $1 million to creditors.

Then in January, furniture seller Brosa fell into liquidation after its restructuring attempt failed, leaving behind debts of $24 million, including $10 million to customers from unfulfilled orders.

In July last year, trendy sunglasses business Soda Shades also went into administration owing $2.3 million, and just a week before, sneaker company Sneakerboy also folded with $17.2 million owed to more than 100 creditors.

Online fashion giant Missguided also had no choice but to call in administrators after failing to secure a rescue bid, with big name brands like The Iconic and Myer selling its wares prior to its collapse.

Even major retailers like David Jones are struggling. The department store chain recorded a double-digit downturn in sales at its city, suburban and regional stores in June, following the wake of the Reserve Bank’s decision to hike the official interest rate even higher in May.

Originally published as Melbourne retailer launches major sale before it shuts down all its stores