More trouble for Jan Cameron with 50 Retail Adventures stores set to close
Thursday, June 12, 2014/
It has been another eventful week for Kathmandu founder Jan Cameron, with reports her Discount Superstores Group is in the process of closing down numerous stores across its Retail Adventures chain.
Fairfax reports 50 Sam’s Warehouse and Crazy Clark’s outlets across the group are expected to close, with Cameron allegedly negotiating a third party investment or sale of the business.
SmartCompany contacted Discount Superstores Group, but the company declined to comment
Cameron was in the news last week following the collapse of Postie Plus, a New Zealand clothing chain the former Rich Lister held a 19% stake in.
The Australian reports Cameron is also the major shareholder in baby food company Bellamy’s Organic, which is heading towards a $100 million initial public offering on the ASX next month.
Cameron bought the troubled Retail Adventures chain out of receivership in 2009 for $85 million, intending to use profits from the business to fund her environmental philanthropy and animal activism, which had become her sole focus following the sale of Kathmandu to a private equity firm in 2006.
While the Kathmandu sale netted Cameron $247 million, she spent the majority of that money just keeping Retail Adventures afloat.
In 2012, Retail Adventures again went into administration with $200 million worth of debt, but Cameron bought it back the following year after striking a $5.5 million deal with creditors, keeping the chain from liquidation.
Administrators Deloitte were not impressed, arguing creditors had more to gain from rejecting the offer, and making allegations to ASIC that Cameron’s company had traded while insolvent.
Brian Walker, chief executive of the Retail Doctor Group, says that the continued troubles at Retail Adventures are part of broader market forces affecting discount retail outlets.
“There are no surprises there – we had the Reject Shop downgrading profits yesterday. Discount department stores are struggling to cope with the rise of online, where you can get similar goods for even cheaper,” he says.
Walker says it would not be surprising if many of the closed stores are metropolitan-based, considering the strong competition in those areas from larger department chains.
“These stores are under pressure from stores like Kmart – the most profitable department store in the country – because their prices are low too,” he says.
“A lot of the problems discount stores are experiencing have to do with locational factors – there might be a future for these stores in deep, regional Australia, but maybe not for very long,” says Walker.