Australia’s bleak retail climate has claimed another scalp with the owner of high-street clothing brands Review, Black Pepper and Yarra Trail sinking in to administration.
PAS Group, which employs 1300 people and operates 225 shops in Australia and New Zealand announced on Friday it had entered voluntary administration.
The ASX-listed group owns a portfolio of women’s fashion brands but has struggled for years.
The decision follows an announcement in April that the group was looking at restructuring options. PAS Group chief executive Eric Morris, said Friday’s decision was difficult.
“The Australian retail sector was already facing significant challenges prior to the COVID-19 pandemic,” he said.
“Against the backdrop of many retailers closing their doors, we have taken proactive action to put PAS Group in the best possible position to navigate through the pandemic and subsequent economic challenges.”
It was a difficult time for Australian retailers, even before the coronavirus outbreak hit in March.
Several household names collapsed in late 2019 and early 2020 alone, including homewares chain Ishka, Harris Scarfe, Jeanswest, Bardot, Bose, EB Games and Dimmeys.
The PAS Group board has appointed PwC partners Stephen Longley, David McEvoy, and Martin Ford as voluntary administrators.
Mr Morris said the board believed PAC Group was solvent but administration was the best way to make changes, “given the issues as a result of unfavourable financial market conditions for retailers, the COVID-19 crisis, and the challenges of restructuring in that environment”.
He said the group would be “open and transparent” with its 1300 employees in Australia and New Zealand throughout the administration process. Most of the workers were stood down when PAS Group closed its stores in late March as part of COVID-19 lockdowns, although they began reopening in early May.
Mr Longley said the administrators would review the company’s operations.
“We will be seeking to assess the best options for the business with a view to restructuring it for a more sustainable future,” he said.
PAS Group stores will continue to trade as normal, in-line with local coronavirus local restrictions in Australia and New Zealand. Store credits and vouchers will be honoured.
For the half-year to December 31, PAS Group reported a $1.2 million loss on revenue of $129.9 million and said it closed the half debt-free with $4.8 million cash on hand.
PAS Group shares closed on Thursday at 5.2 cents, down 65 per cent since the start of the year.