Ethical undergarment retailer Mighty Good Undies has fallen into liquidation and is expected to be wound up unless an 11th-hour suitor emerges.
Liquidators from Dye & Co. were yesterday appointed after a company general meeting resolved to wind-up the company’s parent Mighty Good Group Pty Ltd.
The business has today stopped accepting customer orders and is expected to pull down its e-commerce store by end-of-day Wednesday.
The collapse is a fall from grace for the company, which was founded by Elena Antoniou in 2015 and quickly became a prominent brand, signing a stocklist deal with American department store Nordstrom and attracting celebrities like Tara Moss and Ellia Green as campaign ambassadors.
Mighty Good Undies made waves among customers and other retailers for its explicit focus on ethical trading and so-called “slow fashion”, which prioritised environmentally sustainable business practices.
The business received an A+ grade in the Baptist World Aid 2019 Ethical Fashion Report, becoming one of the only apparel businesses in the country to achieve such a high standard.
But in the context of a highly competitive trading environment, the company found itself in the market for a buyer earlier this year as debts piled up.
Liquidator Shane Deane says Mighty Good’s largest secured creditor, owed about $219,000, now holds remaining stock and other assets previously belonging to the business.
“They’ve tried to sell the business. There was no real interest, definitely not enough to generate a payment that was going to see creditors paid out,” Deane tells SmartCompany.
Deane says offers to purchase the company or some of its assets will be passed on, but if a suitable suitor doesn’t come along the company could no longer exist in six months.
Mighty Good’s financial situation reached tipping point last month when one of its international suppliers successfully sued the business over a $39,000 debt, while a separate case involving an ex-director also came to a head.
Deane says all outstanding orders have been fulfiled and there are no longer any workers at the company to be considered for redundancy payouts.
SmartCompany contacted Antoniou and Mighty Good Undies for comment but did not receive a response prior to publication.