Discount chain's rescue remains work in progress
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.
Frequently Asked Questions about this Article…
Administrators say the supposedly viable core of discount chain Retail Adventures still "requires further restructuring" to become profitable. The business was placed into administration in November after mounting losses, and a sales process is under way while management works to restructure stores, leases and operations.
Jan Cameron, the Kathmandu founder, acquired Retail Adventures out of receivership in 2009 and is running the business under licence from the administrators. She is one of two potential buyers for the whole business and has provided funding to the group, with secured loans totalling about $80 million recorded by administrators.
Administrators reported redundancies increased from an initial estimate of 630 to 763 as of just before Christmas. RSG (Ms Cameron’s operating company) initially took over 238 stores employing about 5,000 staff, and administrators said a further 14 stores faced closure and were under review.
Yes — administrators reported that most key suppliers had resumed supplying the business, and commitments for new stock exceed $58 million, which the administrators described as a positive development for ongoing trading during the sales process.
Administrators expect disclaimed leases—mainly for parts of the business no longer in operation—to generate annualised savings of about $14.4 million.
Yes. Vaughan Strawbridge, who leads the administrators from Deloitte, said they were investigating an unspecified number of transactions that occurred before their appointment. No further details about those investigations were disclosed in the report.
Administrators said Jan Cameron is one of two potential buyers for the entire Retail Adventures business. In addition, about 10 potential buyers have expressed interest in acquiring various parts of the business. The sales process is ongoing, with outcomes yet to be finalised.
It is not known. Administrators stated it is unclear whether the sales process will recover enough to pay Ms Cameron’s secured loans and employee entitlements, and it is uncertain whether it will cover the more than $100 million owed to suppliers.
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