Popular Australian activewear brand Exoticathletica collapses owing $13m
A popular athleisure brand, known for its bold, bright and inclusive gym clothes, has gone bust owing over $13m to creditors, leaving administrators scrambling to secure a buyer.
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A popular Australian women’s activewear brand has gone bust owing over $13m to creditors, leaving administrators scrambling to secure a potential buyer.
The business behind athleisure company Exoticathletica, which specialises in boldly printed, brightly coloured gym clothes for women of all sizes, owes unsecured creditors over $6.2m, including manufacturers Active Apparel Group ($211,931), Andorra Australia ($311,928), Dongguan Huachen Sporting Goods Co ($447,813) and D and J International ($416,447).
Other creditors include banking giant American Express ($224,921), eCommerce agency Common Thread Collective ($114,920), eCommerce logistics company Invenco ($136,553), PayPal ($53,013) and commerce platform Shopify ($557,492).
The Noosa-based brand owes the Australian Tax Office more than $800,000, and has left customers $172,576 out of pocket.
Employees were listed as being owed $114,168, including $37,733 in superannuation, $37,345 in annual leave, $5,803 in long service leave and $33,285.48 in payment in lieu of notice.
Along with the more than $6.7m owed to its secured creditor, the Commonwealth Bank of Australia, total liabilities exceed $13m.
Exoticathletica was founded in 2014 by Leilani Chandler, according to their website, designed to “help women enhance and accentuate their bodies and unapologetically celebrate their uniqueness”.
“(Ms) Chandler became inspired by Brazil’s fitness fashion culture, their celebration of feminine curves and bold designs that encourage women to express themselves,” their website reads.
It understood the brand briefly had an outlet at Sunshine Plaza in Maroochydore that opened in 2019.
Insolvency experts from SV Partners Terry van der Velde and Matthew Hudson, who are now picking through the financial wreckage of the company, have continued to trade the business while searching for prospective buyers.
“We have continued to trade the business to preserve its value, with the aim of maximising the return to creditors,” Mr Hudson said.
“This strategy has allowed the business to remain operational, thereby maintaining its goodwill, customer relationships and employee engagements.
“By trading the business, we have sought to facilitate a sale of the business as a going concern.”
Mr Hudson said Ms Chandler had not provided a deal to creditors to settle debts, known as a deed of company arrangement, at this stage.
The administrators said the company’s total assets are yet to be advised, but estimated the value of stock to be around $2.5m.
“We note stock is continuing to be sold (and therefore diminish) as part of the ongoing trading of the business,” Mr Hudson said.
“It is envisaged the stock will be included in a sale of the business if that occurs.”
Financial records show gross profit for the fashion label plummeted from $12.1m in FY2022, to $5.3m in FY2024. Profit for the financial year to date sits at $3.9m.
It comes after it was previously reported that Exoticathletica had made $7m in one year during the Covid pandemic from the brand’s best-selling ultra-comfortable crop top.
More than 140,000 customers reportedly bought the $49.99 seamless wire-free top online between April 2020 and April 2021.
Mr Hudson said the company incurred losses for the three financial years prior to the administration.
“We note however, based on our preliminary review of the financial information available to us, the company appears to have maintained sufficient working capital to meet its due and payable debts until June 2024; after this time, the company accrued taxation liabilities and debts to trade creditors,” he said.
As a result, he said there would be a possible claim for insolvent trading if the company was placed into liquidation, but noted that Ms Chandler didn’t have the capacity to meet any possible insolvent trading claim.
“We note the director has personally guaranteed a substantial number of the company’s debts, including the debt owed to the (Commonwealth Bank of Australia), which is likely to impact her personal financial position, depending on the outcome of the sale of the business and the realisation of the company’s assets,” he said.
The second meeting of creditors is slated to take place next week.
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Originally published as Popular Australian activewear brand Exoticathletica collapses owing $13m
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