Jan Cameron sends last-minute campaign letter to Retail Adventures' suppliers
Retail Adventures owner and creditor Jan Cameron has written to suppliers in a last-minute campaign to keep her spot at the head of the business, attempting to explain her rationale for the company’s controversial licencing agreement during insolvency.
The letter comes as administrators Deloitte have reportedly received several expressions of interest for the company.
Michael Fingland, the chief executive of turnaround consultancy Vantage Performance, told SmartCompany the letter to suppliers will be welcome, but may be too late for creditors who are already annoyed by the whole administration process.
Creditors have set up their own Facebook page, complaining about the current situation at Retail Adventures. Some have expressed interest in pursuing legal action.
“When you’re in a distressed situation, in the absence of clear information, creditors assume the worst. Looking at this situation, it would appear that a lot of creditors had simply filled the gaps themselves,” Fingland says.
“Stakeholder management is much more crucial in a situation where you’re dealing with something new, like a licencing agreement.”
The licencing agreement enables the company to continue trading, having licenced the brand from the administrators during the insolvency process. The sale process remains as normal, with Jan Cameron having to put a proposal forward like any other entity.
Cameron still hopes to buy the company back, either outright or through a deed of company arrangement.
“We believe the business can be financially viable going forward and management remain committed to this objective,” Cameron says in a letter to suppliers. She reportedly explains how she will spend tens of millions of dollars to keep the business trading.
The administrators have also set financial goals, aiming to cut labor costs by several million and rents by about 10%.
“At least 75% of each cost reduction program in the restructuring and transformation plan will need to be achieved to reach the sustainable financial model target,” Cameron says.
Cameron’s letter also explains how the new licence structure will result in lower fees for insolvency experts, a savings which she identified as around $9 million. This comes as some creditors have complained about being misled, fearing they won’t see much of a return.
Part of the problem, Fingland says, is that a licence structure such as this is so new. However, he says cases like this may become more common as companies prefer them to traditional insolvency arrangements.
“There needs to be a lot more regular communication in a situation like this,” he says. “It’s all about communication.”