Seven Kit and Ace stores in Victoria, New South Wales and Queensland will close over the next week, after voluntary administrators were appointed to the Australian operations of the luxury womenswear label.
The appointment of external managers to the Australian stores is part of a global restructure of the Kit and Ace brand, led by its Canada-based parent company Hold It All Inc. According to Business in Vancouver, the brand plans to close its 32 international stores and cut head-off staff numbers as it shifts focus to its nine Canadian stores and online offering.
Richard Hughes, David Orr and Sal Algeri from Deloitte have been appointed as voluntary administrators of Sew Aus Pty Ltd, which operates seven Kit and Ace stores in Chadstone, Fitzory and Prahran in Melbourne; Bondi Junction and the CBD in Sydney; and Brisbane CBD and the Gold Coast in Queensland.
The administrators will begin closing all of the Australian stores by May 4, with the brand’s parent company committing to paying out all employee entitlements prior to the appointment of administrators.
The Australian operation employs 65 employees, most of whom are casuals.
“It is very early days as far as this appointment is concerned, but the stores will close immediately as they are not viable,” said administrator Richard Hughes in a statement provided to SmartCompany.
“Our main task is to investigate the financial position of the business, assess liabilities, arrange for the efficient realisation of assets and distribute those assets as efficiently as possible.
“At this stage, we do not yet have an estimate of dividends, but will report on this to creditors in coming weeks. Our expectation is that all affected employees will receive outstanding wages and relevant entitlements in coming days, which are being paid directly by the parent company.”
Kit and Ace was founded by the family of Lululemon founder Chip Wilson, in 2014. The brand opened its first Australian store in Melbourne in mid-2015 as part of what was reported to be a global push to open as many as 50 stores around the world.
In early 2016, the brand had as many as 61 stores in Canada but Business in Vancouver reports this number had fallen to 41 stores as of March after a number of rounds of layoffs. Stores will also close in the US and the UK as part of the global restructure.
Employees speak out on social media
With the announcement of the brand’s restructure only days old, Kit and Ace is facing heavy criticism online after employees took to social media to vent their frustration over how the store closures were revealed.
Some Australian employees say the first they heard about the closure of the local operations was via the company’s posts on Facebook and Instagram.
“I work for the Brisbane store in Australia. Our team are so upset and angry with the way you went about this. Thanks for letting us know and giving us a chance to find work elsewhere…Apparently THIS is kit and Ace. #nointegrity,” said one employee on Instagram.
“A real professional way of letting your Australian Team know they have NO JOBS today!!! Waking up to a post, that says our store is closing!! Zero care factor….,” said another.
Former customers, both Australian and international, have vowed to no longer support the brand after learning how staff found out their stores are closing.
“Absolutely disgraceful that your employees found out about the closing by social media,” said one commentator on Facebook.
“A whole lot of negative energy and karma to come your way.”
SmartCompany understands the time difference between Canada and Australia contributed to the situation, with details of the restructure shared through media and social platforms from Canada before the local administrators had spoken to employees.
“Our appointment was only confirmed late on 26 April,” administrator Richard Hughes told SmartCompany.
“All efforts were then made to communicate the news of store closures to employees as quickly as possible early on the morning of 27 April.”
*This article was updated on Friday, April 28.