L Catterton, the previous owner of collapsed swimwear chain Seafolly, will ask creditors to accept a deal to restructure the company, KordaMentha administrators have announced.
A deed of company arrangement (DOCA) proposal for the private equity firm — an arm of multinational luxury retailer LVMH, to regain control of the business — will be voted on next Monday.
Scott Langdon and Rahul Goyal of KordaMentha will recommend the deal, convinced creditors will get a better return if the retailer is returned to familiar hands.
In a statement on Monday, Langdon said he was overwhelmed by the more than 80 interested parties that expressed interest in buying the business over the course of the administration.
“With an optimised retail, online and wholesale network, Seafolly will continue to be the iconic Australian beachwear brand that customers know and love,” he said.
Under the proposal L Catterton — Seafolly’s largest creditor — has agreed not to cut into debtor returns, increasing the share available to other voters.
If successful, L Catterton, which placed Seafolly into administration in late-June, will be handed a significantly slimmed down business, with administrators closing 15 of the company’s Sunburn branded stores, renegotiating leases and reducing head office costs.
Administrators said more than 110 workers will retain their jobs, having confirmed about 120 were on the books when the company collapsed, while Seafolly’s network of 20 stores will remain open.
More than 80 investors came forward to express interest in Seafolly, generating 15 formal expressions of interest.
Four “high quality” bidders were selected by administrators for a final phase of consideration, with L Catterton’s proposal emerging as the preferred option over the weekend.
Seafolly was founded in 1975 by the Halas family in Bondi Beach, but was bought by L Catterton through a series of deals between 2014 and 2018.