The fate of once-thriving fashion label Ksubi could become clear in the next week as administrators seek to lock in a local strategic partnership for distribution.
Vertitas Advisory administrators David Iannuzzi and Murray Godfrey were appointed by US private equity fund Breakwater, which holds security over Ksubi’s intellectual property, to oversee Ksubi’s Sydney-based parent company Mentmore (formerly known as Bleach Group), on February 3 this year.
Iannuzzi told SmartCompany this morning a domestic retailer was in the midst of due diligence on the business, with a view to locking in a distribution partnership model for the group’s jeans, accessories and apparel.
He says the partnership model would see the retailer sell Ksubi products for men and women through its store network, but it would not own the manufacturing or intellectual property rights to the label.
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Iannuzzi says he hopes to secure a deal with the local retailer this week, but would not reveal details of the interested company.
He says the brand’s intellectual property would remain in the hands of Breakwater, which obtained the rights from Bleach Group when it went into voluntary administration in October last year.
He says they could look at a licensing model for the Ksubi label, along with fellow youth apparel brands Something Else and Insight, which were also originally owned by Bleach Group.
Iannuzzi says all current Ksubi stock is now being sold through a Sydney-based pop-up store, which he says could become a longer term fixture as it is proving successful. Mentmore is continuing to operate the brand’s online store.
The news follows the closing of Ksubi’s seven retail stores on February 13, by a separate liquidator, Gavin Moss of Vincent’s. Moss was appointed voluntary administrator of Ksubi on January 31.
A comment on the Veritas website says this was done “without consulting Breakwater”.
“…this despite the understanding of all relevant parties that the aim was to devise a strategy ensuring retail operations would continue until the business was sold as a going concern.”
The web of Ksubi’s administrators also included the appointment of administrators Rod Sutherland and Andrew Spring of Jirsch Sutherland late last year. They retired as administrators on January 30 after Breakwater paid Moneytech Finance, the first secured creditor, who originally appointed them as voluntary administrators.
Vincent’s Chartered Administrators was contacted for comment this morning but no reply was available prior to publication.
The updates follow a rocky few years for the cult brand. Originally founded by designers Dan Single and George Gorrow, it was rescued from administration by Bleach Group in 2010, reportedly for around $5 million.
It then went into administration again in October 2013, and Bleach Group chief executive Mark Byers pointed to challenges of the Asian supply chain as a cause.
“The need for a voluntary administration… is regrettable,” Byers said in a statement at the time.
“The restructure was necessary to ensure the future of the Ksubi and Insight brands and more than 100 jobs globally and we can now look forward with confidence.”
In early 2013, the Australian Securities and Investments Commission banned co-founder Dan Single from managing or directing a company for three years, after administrators found Ksubi had traded while insolvent.