THE supposedly viable core of collapsed discount chain Retail Adventures "requires further restructuring" to become profitable, administrators have told a creditors' meeting, while revealing further store closures and job losses.
Documents that administrators lodged with the Australian Securities and Investments Commission reveal that further restructuring is being done by Kathmandu founder Jan Cameron, who acquired the business out of receivership in 2009 but had to appoint administrators in November after losses mounted.
She continues to run the business under licence from the administrators while a sales process is conducted.
The number of redundancies has increased from the first estimate of 630, to 763, as of just before Christmas when the second meeting of the creditors' committee was held.
Vaughan Strawbridge, who leads the administrators from Deloitte, said they were investigating an unspecified number of transactions before their appointment. No more details were available.
There was some good news. The administrators reported that most key suppliers were again supplying the Retail Adventures business, and commitments for new stock exceed $58 million. Disclaimed leases, mostly relating to parts of the business no longer in operation, are expected to generate annualised savings of about $14.4 million.
Ms Cameron's operating company, RSG, initially took over the running of 238 viable stores - employing 5000 staff - under licence from administrators in November.
Administrators said a further 14 stores faced closure and were under review. It is not known if the sales process will recover enough to pay Ms Cameron's secured loans and employee entitlements, let alone the $100 million-plus owed to suppliers.
Ms Cameron acquired the Retail Adventures business out of receivership for $70 million in 2009, and has secured loans totalling $80 million from funding she provided as the business racked up losses totalling $110 million in the three years she ran it.
"We are confident Jan Cameron has the ability to run the business forward," said the administrators in the report.
Ms Cameron is one of two potential buyers of the Retail Adventures business in its entirety, with another 10 potential buyers expressing interest in acquiring various parts of the business.