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Oroton’s board hasn’t managed to find a viable way out of the retailer’s financial woes. Photo: Nic WalkerIconic handbag retailerOrotonGroup has gone into administration, becomingthe latest casualty in Australia’s retail bloodbath.
The company said on Thursday morning that an eight-month strategic review failed to find a viable option to secure its future.
Its 59 Oroton stores, including the one at Westfield Kotara, will continue to trade as usual while administratorsDeloitte Restructuring Services pursue a sale or a recapitalisation, the company said.
Oroton has suffered falling sales in recent years and racked upa $14.2 million loss in 2017.
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Thecompany’s shares, which went into a trading halt on Tuesday while the boardfinalised the result of its review, had fallen from$7.80 in early 2013to $2.44 a year ago. On Monday, they closed at just43¢.
Interim chief executive Ross Lane, whose grandfather Boyd Lane founded Oroton in 1938 and whose family holds 21 per cent of the company’s shares, said management was unable to find a better outcome than voluntary administration.
“The board is disappointed that it has had to take this step after running such a comprehensive process,” he said.
“However…. it is apparent that voluntary administration is necessary to protect the Oroton business and the future of this iconic Australian brand.”
AdministratorVaughan Strawbridge said he and hiscolleagueGlen Kanevsky would be focused on continuing to operate the business as they seek to sell or recapitalise the company.
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Restructuring the group was a possibility, and “our ambition is that a stronger Oroton business will emerge from this process”, Mr Strawbridge said.
Oroton joins a string of mid-sized fashion retailers to collapse over the past 18 months, with Marcs, David Lawrence, Herringbone, Rhodes & Beckett,PaylessShoes and Pumpkin Patch all going under.
Oroton said in August that it would close itssix Gapfranchise clothing stores so it could focus on its core handbag brand.
The company’s stock is tightly held, withfund manager and long-time company backerWillVicars, of Sydney-based firm Caledonia, owning18.2 per cent of shares.
Gazal Corporation, the listed wholesaler of Calvin Klein, Tommy Hilfiger, Van Heusen andPierre Cardin apparel in Australia,bought 7.3 per cent of Oroton in July.
A privatisation bid by the Lane or Vicars camps, or a takeover from Gazal, were all floated as possible outcomes from the review.
The company had net debt of $5.4 million at the end of FY17, and a market capitalisation of $18.3 million at its last share price. The 31 per centshares in free float had a value of just $5.7million.
The Sydney Morning Herald