A hairdressing chain that previously raised more than $8.7 million from investors and grew to 53 outlets has plunged into liquidation, with just three outlets still trading.
Brendan Nixon of Stanley Morgan Chartered Accountants was appointed as provisional liquidator to Evolve Salons on November 9, after the company’s three directors all resigned on October 28.
Evolve Salons was founded two year ago and is based in Queensland. The majority of its salons were located on Australia’s east coast.
Get business news first
Sign up to SmartCompany’s daily newsletter
The Australian reports that company accounts filed with the court this week show Evolve Salons raised more than $8.7 million from investors for its roll-out strategy, which involved spending $9.82 million buying other hairdressing salons.
These hairdressing businesses included Bach Hair, Lattouf Hair and Day Spa, Bossy Hair, Meika, tmh and Legends Hairdressing.
Evolve Salons employed approximately 300 people across 53 salons.
But by September 30, the company accounts provided to the court showed the business had less than $4 in one of its bank accounts, while another was overdrawn by $487.
The Australian reports just three of the group’s 53 outlets are still trading.
Just over a week before a liquidator was appointed to the company, the remaining members of its board all resigned, including managing director Wes Coote, non-executive director and chair Stephanie Daveson and non-executive director Craig Chapman, who reportedly stands to lose approximately $1 million from loans he made to the company.
Evolve Salons had previously attempted to conduct an initial public offering to list on the Australian Securities Exchange, however, the Courier-Mail reports concerns emerged in December 2014 that the company was experiencing difficulty in repaying $6 million in bank loans.
According to the same report, Evolve booked losses of $2.66 million in 2014 and $2.7 million the year before.
Brendan Nixon of Stanley Morgan Chartered Accountants told SmartCompany this morning discussions are underway with a number of interested parties who are looking to do transactions that would see them resuming trade in a number of the salons.
Nixon also confirmed the company had ceased trading prior to his appointment as provisional liquidator and employees have since been notified that their employment has been terminated.