Beleaguered handbag boutique Colette by Colette Hayman will close 33 of its stores as it becomes the latest in a long line of retailers forced to close shop or downsize.
The CBCH group of companies, trading as Colette by Colette Hayman, entered voluntary administration earlier in February, joining a growing list of companies to do so in the past months.
At that time, Colette’s administrators, Deloite, said the company had been “impacted by the current weak retail environment, as have many others”.
But at least one analyst says there is an element of “lazy retailing”.
Vaughan Strawbridge, Sam Marsden and Jason Tracy, restructuring partners for administrators Deloitte, confirmed a total of 105 stores would remain in the Colette by Colette Hayman portfolio as it is readied for sale.
In a statement, Mr Strawbridge said all efforts were being made to redeploy staff to other stores, and that all those impacted were “expected to receive all their wages and entitlements in full”.
“This is never easy and we have regrettably had to make the decision to close 33 stores. We are working closely with the Colette management team to effect the closures quickly while seeking to redeploy staff impacted,” he added.
Among the closures will be 10 stores in Queensland, eight in Victoria, six in New South Wales, five in Western Australia, one in both the ACT and South Australia, and two in New Zealand.
At the time of the collapse, Deloite said Colette had been “impacted by the current weak retail environment, as have many others”.
News of the Colette closures come just a day after homewares chain Ishka announced it had entered administration, and it follows the closure or downsizing of well known chains including Harris Scarfe, Jeanswest, Bardot, Bose, EB Games and Dimmeys.
Colette was founded in 2010 by Colette Hayman, former owner of the Diva jewellery chain. The retailer has reported yearly gross sales of more than $140 million, selling upwards of three million handbags per year.
In the first eight weeks of the year, a number of other retailers have collapsed, including homewares chain Ishka, which announced on Thursday that it had entered administration.
Professor Gary Mortimer from the Queensland University of Technology business school told the ABC that certain sectors of the retail industry were more exposed to tough economic conditions than others.
“We’ve seen some great results come out of the likes of JB Hi-Fi and others,” Mr Mortimer said.
“But mid-tier discounters like Harris Scarfe, mid-tier fashion brands like Bardot and Jeanswest, those particular areas are reasonably exposed to discretionary spending,” he added.
Mr Mortimer said stagnating wages and people paying down debt instead of spending were harming the industry, but problems with retail businesses models are also to blame.
“I think there’s a lack of innovation, a lack of differentiation. If I look at mid-tier fashion, menswear and ladieswear brands, everyone’s doing $29 chinos or $20 dresses,” he told the ABC.
“I think there’s also an element of lazy retailing, so retailers say, ‘Hey, look, we’ll just do a percentage-off sale and that will increase our foot traffic,’ but then everyone else repeats to 20, 30, 40 to 50 per cent off.”