Almost 700 Australian retail jobs are expected to be saved with the announcement that beleaguered apparel chain Jeanswest has been bought out of administration.
Jeanswest, which entered administration last month, was bought by Harbour Guidance Pty Ltd, the Australian subsidiary of Hong Kong’s Harbour Guide Ltd owned by Chun Fan Yeung and his family interests.
Mr Yeung is a minority shareholder in Howsea Ltd, the previous owner of Jeanswest.
Voluntary administrators KPMG last month announced plans to close 37 of the chain’s 146 stores as part of a restructure, forcing 263 employees into redundancy.
The buyout, expected to be completed in mid-March, could include up to 106 stores employing up 680 staff, according to a statement from KPMG.
The fate of the stores is conditional on landlords agreeing to revised lease terms with Harbour Guidance.
“This is a great result for all parties,” KPMG’s James Stewart said in a statement.
“Retail is a people business and the Administrators greatly appreciate the resilience of the Jeanswest staff through the administration process,” he said.
Harbour Guidance managing director George Yeung said the company was committed to growing the Jeanswest brand and continuing to serve customers around the country.
“The acquisition of [the] Jeanswest business will present an opportunity to rejuvenate this iconic brand well known to the Australian community,” he said.
Jeanswest’s decline came amid the collapse of a slew of Australian retailers over the past year including Harris Scarfe, Karen Millen, Colette by Colette Hayman, Bardot and Ishka.
Founded in 1972, Jeanswest blamed its turn in fortunes on tough market conditions and the shift to online.
According to KPMG, Jeanswest owed creditors $50 million, including $2.6 million to employees.
Professor Gary Mortimer from the Queensland University of Technology business school last week told the ABC that certain sectors of the retail industry were more exposed to tough economic conditions than others.
“Mid-tier discounters like Harris Scarfe, mid-tier fashion brands like Bardot and Jeanswest; those particular areas are reasonably exposed to discretionary spending,” Mr Mortimer said.
“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,” he added.