Kathmandu founder Jan Cameron’s troubled discount retail chain has collapsed into receivership for the third time in five years.
Just weeks after reports the former Rich Lister was planning to dramatically cut the chain’s store footprint, Cameron called in voluntary administrators Nicols + Brien on Monday to take control of DSG Holdings, the company behind the Retail Adventures chain which operates Sam’s Warehouse and Crazy Clark’s retail outlets.
David Winterbottom and Rahul Goyal of KordaMentha were appointed as receivers on Tuesday and are now exploring options to sell the business as a going concern.
A spokesperson for KordaMentha told SmartCompany DSG Holdings has been “losing money for quite some time”, which has been exacerbated by a general decline in the retail sector.
SmartCompany understands DSG Holdings owes in the vicinity of $20 million to trade creditors, although this is a relatively minor component of the company’s debts. Most of the debt is owed to a number of other companies owned by Cameron, including Bichen Investments.
DSG Holdings is also understood to owe another $10 million in staff entitlements. SmartCompany attempted to contact DSG Holdings but did not receive a response prior to publication.
KordaMentha said in a statement on Tuesday DSG Holdings currently employs approximately 2500 people across 143 retail outlets. The company also operates a distribution centre in Queensland and a head office at North Ryde in Sydney.
Goyal said in the same statement it is too early to fully determine the receivership strategy for DSG Holdings, but said the receivers immediate priority is to “exit from unprofitable stores whilst consolidating stock and trying to effect a going-concern sale for at least part of the business”.
It’s the latest chapter in the story of the troubled retailer, which Cameron bought out of receivership in 2009 for $85 million. At the time, Cameron intended 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 outfit in 2006.
Retail Adventures went into administration again in 2012, with debts worth $200 million. But Cameron bought the company back the following year after striking a $5.5 million deal with creditors, keeping the chain from liquidation.
Administrators Deloitte were not impressed at the time, arguing creditors had more to gain from rejecting the offer, and making allegations to ASIC that Cameron’s company had traded while insolvent.
Cameron’s investment in New Zealand clothing chain Postie Plus has also made headlines this month, after the company which Cameron had a 19% stake in, also collapsed.