Only a month out from Christmas one of Australia’s largest independent shoe retailers, Payless Shoes, has collapsed and been placed into voluntary administration, putting 870 jobs at risk.
It is a bad time for retail, with children’s wear company Pumpkin Patch, which also recently fell into receivership, failing to find a buyer and announcing it will close all of its stores, with the loss of 1,600 jobs.
Ferrier Hodgson partners Jim Sarantinos, James Stewart, and Peter Gothard were appointed voluntary administrators by the company’s board of directors today.
Administrator Jim Sarantinos said it was too early to identify the primary causes of the company’s current financial position and that it would be business as usual while the administrators consider the restructuring and realisation opportunities for Payless Shoes.
“Payless Shoes is one of the best known independent shoe retailers operating 131 stores and an online business”, Mr Sarantinos said.
Pumpkin Patch shutters 27 storesPumpkin Patch shutters 27 stores
“We are immediately calling for expressions of interest for a sale of the business as a going concern.”
Mr Sarantinos said that employees will continue to be paid by the administrators and that it is expected that employee entitlements will be fully covered from the assets of the company.
Payless Shoes has 870 employees and annual sales of approximately $75 million.
Payless Shoes began in 1980 and grew its store network over the next three decades.
In 2013, after going into administration, the business (at that time around 150 stores) was sold to Payless ShoeSource in the USA. Payless ShoeSource is an American discount footwear retailer headquartered in Topeka, Kansas and founded in 1956.
Payless employs more than 25,000 staff worldwide and is a privately held company owned by Golden Gate Capital and Blum Capital Partners.
Meanwhile, no buyer has been found for Pumpkin Patch, with the company to sell all its stock and close all its stores.
Receiver Brendon Gibson from KordaMentha said they had wanted to sell the business as a going concern but had no other option after failing to receive any serious expression of interest.
“Unfortunately, while the brand is still attractive, the business itself ultimately drew no interest at the conclusion of the sale process,” Mr Gibson said. Pumpkin Patch’s debt to ANZ Bank rose to $46m from $39.1m in the year to the end of July 2016. It posted a loss of $15.5m in the same period.