Australian accessories retailer Colette by Colette Hayman will shut two stores in New Zealand and another 31 in Australia next month as part of a restructure of the business.
The fashion chain, operated by CBCH group of companies, was placed into voluntary administration last month following a decline in sales, with Deloitte Restructuring Services partners Vaughan Strawbridge, Sam Marsden and Jason Tracey appointed as administrators on January 31.
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On Friday, administrators announced that a quarter of the chain's 105 Australasian stores would be put up for sale, while 33 spread across New Zealand and Australia would permanently close.
Colette by Colette Hayman operates about 15 stores in this country. Its Albany store located in Auckland, and another in New Plymouth, will close as part of the restructure. It is not yet known exactly when, though administrators have said it would be over the next three weeks.
Staff at the Albany store were not aware of the closure plans when contacted by the Herald this morning.
Colette New Zealand regional manager Kayla Kemp declined to comment.
The administrators said "all efforts were being made to redeploy staff affected by the closures" and staff were expected to received their wages and entitlements in full.
Strawbridge said the decision to close down a quarter of the store network came following a review of the portfolio, despite the company making A$140 million (NZ$146m) last year.
"This is never easy and we have regrettably had to make the decision to close 33 stores.
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"Closing the 33 loss-making stores will position us with improved group performance and time to find a recapitalisation or sale of business solution for the business," he said in a statement.
The administrators, who continue to trade the business, said the business had gained strong interest, with initial expressions of interest due this coming week.
The administrators have been contacted for further comment.
Retail analyst Chris Wilkinson, managing director of First Retail Group, said the situation was unfortunate as Colette had "captured the attention" of New Zealand shoppers, but in recent years had come up against competition from other fast fashion retailers.
"They were caught in a relatively specialised segment [of the market] in an area which is seeing significant continual change," Wilkinson told the Herald.
"Since their heyday, fast fashion has continued to grow and in many ways that has overlapped their ranges."
Wilkinson said the largely mall-based retail business would be attractive for similar retailers, such as jewellery chain Lovisa, which could leverage off synergies. "The challenges? Lovisa has quite a lean model and Colette shops are larger so it may be something like the Colette range actually wraps into Lovisa as opposed to take over what's [already] there."
Colette could also work well within Woolworths Group's portfolio (the owner of department store David Jones and Country Road), if it was in a better financial position, he said.
Colette was founded in 2010 in Australia and operates 180 stores in total, including in South Africa and Britain.
Australian retailers vanish from NZ
Over the past few years retailers Dick Smith, Topshop and Esprit have gone under in Australia and vanished from New Zealand retail centres, along with local retailers such as Ziera Shoes, Pumpkin Patch and Andrea Moore.
Clothing retailer Jeanswest is the latest retailer to be placed into voluntary administration across the Tasman.
Retail in Australia was facing a "triple whammy" threat, following a slowdown in the economy there, coupled with the bush fires (which had affected most retailers there) and the coronavirus outbreak, which could affect supply chains, Wilkinson said.
"These significant uncertainties all factor into the decisions when, say for instance, liquidators are looking at what they are going to do with the business or whether a business is looking at taking it over."
More retailers had gone bust in Australia compared with New Zealand, in recent years, due to the size of the market, and many retailers there not been able to switch tack quick enough, he said.
"New Zealand businesses have got a natural resilience ... being in a small place you actually have to be quite nimble and agile. Over the last few years, with the threat of Amazon, that has really sharpened our businesses' approach.
"Businesses [here] have moved quite fast in response to [Amazon] whereas the Australian businesses are typically much larger and it's more difficult for them."