Rumours have been flying since late last week about the circumstances of Kit Willow Podgornik’s departure from her fashion label, with the designer telling media she was sacked.
The designer is said to have hired a team of lawyers to take on fashion conglomerate Apparel Group, which in 2011 acquired her label Willow, becoming the majority owner, according to The Sydney Morning Herald.
Podgornik told Fairfax Media she was “heartbroken” and “shocked” by Apparel Group, which also owns the Saba, Sportscraft and JAG brands, when it decided to cease her employment.
“While I have now left Willow, it was certainly not under my own volition,” Podgornik said as quoted by Fairfax.
“My employment was terminated without my consent. I was not a consultant for the label; I was a shareholder, director and a creative director.”
Podgornik says she has retained legal firm Arnold Block Leibler and is trying to resolve the issues with Apparel Group directly.
Failing a resolution, she intends to go through the courts.
“It is unthinkable to me not to be associated in any way with the label which bears my name,” she said.
The fashion designer has garnered support over social media since the story broke last week, with Twitter users expressing their sadness at the news.
When Willow was acquired by Apparel Group in September 2011, she said at the time the business was still “her baby”.
SmartCompany contacted Apparel Group, but no comment was available prior to publication.
Apparel Group also operates the manufacturing and wholesale distribution for the Bettina Liano label. Bettina Liano’s business, including her retail stores, went into administration in October, with reports it is now in liquidation.
While further details regarding Willow’s dismissal are not yet known, it raises questions regarding how a business owner can ensure their job is secure should their company be acquired.
Pitcher Partners partner Michael Sonego told SmartCompany the job requirements and specifics need to be carefully decided and put into the acquisition contract.
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“It comes down to both parties agreeing on what the person’s role will be. If you have money owing to you still, you definitely want to ensure that you’re still present in the company and it’s stipulated how the business will operate so that you’re protected,” he says.
“You need to make sure the buying party doesn’t go and change how things work when they take over. If the business owner transitions with the business it also often helps with stability of the business as well.”
Sonego says a business owner transitioning with the company can help it feel like “business as usual” to the staff and to suppliers.
“You need to make sure that the customers and suppliers are fully informed the whole way through of any changes and what those changes will be. When you’re buying a business, you’re buying relationships,” he says.
“You can plan how certain things will respond, but people are an unknown and you have to invest really heavily in HR. Among the staff there is often an immediate assumption that there will be redundancies when this is often not the case, but if you’re not communicating, people get concerned.”
Sonego says hostile takeovers can occur in public markets, but generally acquisitions work best when there is mutual respect and understanding.
“It makes it easier and if the parties are going to stay involved, then it’s especially important,” he says.