The collapse of the debt-laden Lisa Ho fashion group has left prominent shopping centre landlords out of pocket by around $500,000.
A creditors report prepared by voluntary administrator Todd Gammell and Barry Taylor of HLB Mann Judd, appointed in May, reveals that Lisa Ho operated 10 standalone retail stores and seven concession stores within David Jones prior to its collapse.
Seven of these standalone stores and five concessions stores have since been shut down with “the balance of liabilities relat[ing] to lease arrears at appointment of approximately $500,000 and other trade creditors” according to the report:
The report notes that trustee Perpetual Limited is seeking payment of “$46,406.65 for base rent, outgoings and GST payable pursuant to the lease of Shop 480 in the Chadstone Shopping Centre on 12 December 2012” and commenced proceedings to recover the money in April.
Stores which continue to trade are in Ipoh’s Strand Arcade on George Street in Sydney, ISPT’s Wintergarden complex on Queen Street Mall in Brisbane and at 350 Bourke Street in the Melbourne CBD.
The Lisa Ho Group closed the Woollahra store in Sydney prior to the appointment of the Administrators.
A review carried out by the creditors identified problems before the coming was placed in administration including that a number of retail stores were “unprofitable on the basis of the current rental and wage costs given the level of sales with a “number of stores” identified for closure prior to the appointment of administrators appointment.
However, such was the dire financial position – an estimated $11 million worth of debt – that the group was “unable to fund the costs of vacating and terminating the leased sites” – a number of shops had bespoke fit outs financed by St.George Bank.
The report reveals that the Lisa Ho Group made a loss of $2.3 million for the year to June 2012 with sales falling to $13 million.
Also in 2012, the group cut costs by over $1 million by reducing its head office and retail staff.
Lisa Ho sold personal assets including property and furniture amounting to $1.8 million to provide working capital for the failing business.
She also contributed $600,000 to pay wages and other business costs.
This article first appeared on Property Observer.