Troubled fashion retailer Colette by Colette Hayman owes creditors $40 million, but this does not include rents, and is expected to be much higher, administrators say.
Vaughan Strawbridge of Deloitte Restructuring Services, who was appointed administrator of the accessory chain, along with Sam Marsden and Jason Tracey on January 31, said the Australian retailer owed creditors about A$40m ($41.6m) upon his appointment, though the final number is yet to be calculated.
The final amount was expected to be much higher once landlord rents and others costs were factored in, and administrators were still working through claims, Strawbridge told the Herald this morning.
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"Ultimately, how much creditors will be owed will depend on the claims coming from the landlords with closing stores, and those claims haven't been worked out yet," Strawbridge told the Herald.
Colette was founded in Australia in 2010 and operates about 140 stores in Australasia, including about 15 in New Zealand, and 40 spread between South Africa and Britain.
The chain employs more than 300 staff and last year had annual gross sales of more than $140m, but in recent years the business has taken a hit from Australia's "weak retail environment", where the majority of its business comes from.
Strawbridge hoped that the administrators would be able to secure a buyer to take over the business in its current state.
"The intent is to sell [Colette] as a whole," he said, adding that trading since the appointment of administrators had been "good".
Expressed interest so far had been from trade buyers and "other strategic buyers" based in Australia, he said.
"We've had a process that we're running and it's called for indicative offers by the close of business today. We do have a level of interest and we've got a number of confidentially agreements that we've sent out along with information memorandums so we are expecting some offers today," he said.
"There has been a good amount of interest so far."
He was unable to discuss how much the business was on the market for. The administrators were letting "the market determine the price".
Administrators announced on Friday that 33 Colette by Colette Hayman stores, including two in New Zealand - one in Albany in Auckland, another in New Plymouth, would close next month, to enable them to position it with "improved group performance and time to find a recapitalisation or sale of business solution".
No closing date for the two New Zealand stores had been fixed, though Strawbridge said this was expected to be within three weeks.
"Whether or not they close earlier will depend on how sales go in those stores."
The decision to close the Albany and New Plymouth stores was largely due to the level of sales, and the rent paid on those stores, Strawbridge said.
"Those stores were not viable to retain."
Administrators would look to finalise a buyer within the next six to eight weeks, and are seeking to have a result on the future of the chain by the end of April.