A family business which has been operating for 68 years has entered administration, although a buyer may be on the horizon to rescue Ambassador Clothing.
Geoff Reidy, of insolvency firm Rodgers Reidy, was appointed as the administrator of Ambassador at the start of this month.
The clothing manufacturer is based in Marrickville in Sydney’s west, with an annual turnover of $3 million to $4 million.
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The family business was started by managing director Lawrence Chahoud’s father and uncle in 1944.
Ambassador produces menswear and womenswear under the Zambelli and Nic Green labels, as well as manufacturing uniforms, including a previous contract that ran for 15 years with the NSW Police force.
However, Reidy told SmartCompany that Ambassador suffered “some shocks” with a decline in retail and the global financial crisis.
“It has cut back from being a manufacturer and retailer to predominantly a manufacturer, and reduced staff from 140 to just under 20, having closed all its retail outlets. As a legacy of that, it has a whole bunch of debts it can’t pay so it needs some fresh invigoration,” he says.
Reidy says while Ambassador’s external debt is only around $1.3 million it owes a large bank debt in excess of $4 million to the National Australia Bank.
He is looking to sell the business and says one purchaser is lined up to buy it.
“The sale should be resolved within the next week. The potential buyer is an Australian company and a lot of the staff will be kept on, although they will do their own restructuring,” he says.
“It has very good potential to be a good niche business in the future, hopefully a success story in the rag trade.”
A second creditors’ meeting will be held in Sydney on December 6.