Family-owned menswear business founded in 1936 collapses despite $6 million turnover
Thursday, August 1, 2013/
A family-owned retail fashion business in rural New South Wales founded in 1936 has collapsed, with administrators saying tough trading conditions and a poorly-timed expansion are to blame.
Brenstew, which currently trades in five retail outlets located in Dubbo, Tamworth, and Armidale under the brands Blowes Menswear, The Wardrobe and URXs, had administrators appointed last week. The company turns over more than $6 million annually.
The collapse is just one of many in the fashion industry over the past few years, which has suffered from poor consumer confidence and lower margins.
Paul Burges and Peter Krejci of BRI Ferrier were appointed to the company last week.
Burges told SmartCompany the businesses are just one half of the Blowes family retail business and the others will remain unaffected.
“The business does have its origins back in 1936, but 14 years ago two branches of the Blowes family split,” he says.
“They also had operations in Port Macquarie and Chatswood, but we took immediate steps to close these because they were a drain on resources,” he says.
Burges says the company’s decision to expand to Port Macquarie was “untimely” and was a “drain on company resources” at a time the business couldn’t afford it.
“You don’t have to get much wrong in the retail space to have pretty dire consequences. It’s been under pressure from historically low consumer sentiment as we’ve become a nation of savers and there is less money flowing through the economy.
“Added to this there have been the tectonic structural shifts in the way we do business,” he says.
Burges says consumers from regional Australia have been early adopters of online shopping and this has placed pressure on country retail outlets.
The administrator would not reveal the company’s debt level or its major creditors.
Burges says since entering voluntary administration trade has been “pleasing”, giving hope to a possible sale of the business.
“There is some real support from consumers in Tamworth and Dubbo and there is real support in the marketplace.”
“There is very real prospect of a sale. There is nothing wrong with the brand, it’s solid and it means something. There will always be the need for some representation of a physical store,” he says.
So far only the Chatswood and Port Macquarie stores have been closed, meaning the jobs of four full-time staff and some casuals have been lost, while there have been no further job losses at the remaining stores.
“The operations are continuing pretty much as they were, but there are slightly higher levels of discounting in the remaining stores,” he says.
Expressions of interest are now being sought by August 6 for the company and its assets, which include modern leased premises, online stores and integrate online inventory and SEO software and experienced long-term staff.
The collapse of Brenstew comes as earlier this week Ragtrader reported one of the fashion industry’s longest servicing suppliers shut its doors. StandardKnit Fabrics and Universal Dyers reportedly announced it will be closing down as of August 31, 2013 in response to “sustained deterioration” in recent years for locally produced clothing.
Brenstew also joins a long list of established Aussie retailers to be placed in administration this year.
The fate of Kirrily Johnston remains unknown, as earlier this month it entered administration after hitting financial trouble, despite having around 70 wholesale clients.
Well-known brand Lisa Ho also collapsed this year, announcing in June it was unable to find a buyer despite rumoured interest from multiple parties including Myer.
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