Fashion group Sass & Bide owes $500,000 to a failed fabric business owned by the husband of fashion designer Lisa Ho, Philip Smouha.
Sass & Bide is one of a long list of rag traders that owe $4 million to Smouha Fabrics, which collapsed earlier this month.
New chief executive of Sass & Bide and co-founder of Mimco, David Briskin, says the $500,000 is normal trading debt.
"It will be paid well within trading terms," he told SmartCompany this morning.
Briskin and Daniel Besen, who sold out of fashion accessory company Mimco last year, have recently bought a major stake in Sass & Bide as a condition for a $1.5 million loan.
Accounts from 2006 show the company borrowed $7 million from the ANZ bank and the two directors were loaned $6.52 million. Last August it obtained a loan from a company associated with one of Sass & Bide's founders Sarah-Jane Clarke and a second loan from a relative of co-founder Heidi Middleton.
Briskin says that while times are tough in the fashion industry, there are also companies doing well. "We are just focusing on expanding our stores and brands." He says there is always the opportunity to look for acquisitions.
Meanwhile, creditors of Smouha Fabrics are meeting this morning. The fabric importer appointed administrators PPB to Smouha Fabrics, White Stallion, which trades as Hills Textiles, and the boutique brewery Lucky Drink Company, after fearing they may be unable to pay their debts on 19 March.
Smouha has also tried to sell three prestige properties - a Bellevue Hill home, a Waterloo business park and a horse stud.
While the Bellevue Hill property sold for a reported $17 million (believed to be $5 million lower than the previous highest offer) the capital injection was not enough to save the company from collapse.
Administrator PPB intends to advertise the business and assets for sale.
Related story:
