A fashion retailer with Young Rich List founders has been placed in receivership in another blow to the fashion industry.
Streetwear brand Unit Technologies was placed into receivership yesterday following the appointment of Ferrier Hodgson partners Tim Michael and James Stewart as receivers and managers.
The company, which specialises in streetwear apparel and accessories, operates seven stores across Australia and employs 40 people. It also supplies more than 400 independent retailers.
The brand was established in 2002 by two brothers, Paul and Ian Everest, in their parents’ garage after a $600 investment which went towards a screen printing press.
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The Everests gave up their day jobs two years later and in 2011 made their Young Rich List debut with a combined wealth of $25 million.
Michael said in a statement Unit Technologies’ decline in performance was due to the discretionary spending drop currently being felt by many Australian retailers.
“Unit’s heritage and authenticity in the action sports industry has allowed the business to capture the attention of Gen Y consumers and build its brand into a leading designer, wholesaler and retailer of streetwear apparel,” he said. “We are immediately calling for expressions of interest for a sale of the business.”
Employees will continue to be paid by the receivers, and employee entitlements will be covered if the business cannot be sold.
Colin Porter, managing director of CreditorWatch, told SmartCompany there are some clear signs that the fashion sector is struggling.
“It’s driven by retail and there’s certainly no sign of improvement in that area,” he said. “In a lot of the smaller strips there are pop-up stores, which I see as an entrepreneurial step by retailers where they are leasing short term casual space. This allows new start-ups to come through and shoppers love it.”
A number of high-profile fashion retailers have collapsed this year. Earlier this month, ASX-listed women’s clothing business UnderCoverWear collapsed following “difficult times”. The company posted a net loss of $1.36 million for the 2013 financial year.
In December last year, online fashion retailer Jasu ceased trading – owing unsecured creditors a total of $490,301.33.