The chief executive of collapsed clothing retailer Fletcher Jones is reportedly considering a management buyout offer of the 93-year-old clothing retailer, while administrators seek more time to secure a deed of company arrangement as part of the sale process.
According to the Australian Financial Review, Fletcher Jones chief executive Phillip Smith is heading a buyout offer for the business, which has dozens of stores and hundreds of staff across the country.
Smith was contacted for comment, but on holidays. Head office staff could not comment on details on any offers for the company.
The paper reports that administrator Cor Cordis is today heading to the Supreme Court seeking an extension of time to put in place a deed of company arrangement. The DOCA would be a vital part of any sale.
Expressions of interest in the business are due by January 23 and administrator Bruno Secatore wants to have a deal completed by the end of March.
Fletcher Jones went into voluntary administration last month amid tough retail conditions and difficulties in attracting younger people into their stores.
Shortly after his appointment, Secatore closed 15 stores and slashed staff numbers by 61, leaving just 29 stores nationwide.
After announcing the store closures, administrator Bruno Secatore said interest in the business had exceeded expectations, with dozens of offers 24 hours after its appointment and 10 serious bidders.
The company, which turned over more than $24 million in the 2011 financial year, is being promoted as a “significant turnaround opportunity.”
According to the paper, it made a small loss in the year to June 2010 after a 9.6% fall in sales.
A spokesman for Cor Cordis said administrators are still waiting for all creditors to confirm their claims before an accurate debt load can be confirmed, although Fletcher Jones' owner, the Dimmick family, are believed to be the largest creditor.
The company started in 1918 when returned soldier Fletcher Jones began tailoring, and eventually grew into a 3000-strong business with a strong commitment to its employee-shareholders. Its first store was opened in the Victorian town of Warrnambool in 1924.
When Jones died in 1977 his son David became the managing director of the company. However, the rise of Chinese manufacturing and tariff cuts hit the company hard.
David Jones was voted out in 1991 of the business after massive losses, and staff lost their shares. It was bought by the Dimmick family, who also control Geelong Textiles, in 1993.
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