Australian swimwear brand Seafolly is the latest retailer to enter administration, citing the “crippling financial impact” of the COVID-19 pandemic.
Administrators from KordaMentha have been appointed and say they will begin the process of selling the business immediately.
Seafolly, which was founded in 1975 in Sydney’s Bondi Beach by Peter Halas, has 44 stores in Australia and 12 overseas, as well as stockists globally.
Some of its stores operate under the Sunburn brand, which also stocks other swimwear labels.
The number of potential store closures or job losses remains unclear – Seafolly has 129 employees in Australia.
It's not just #Covid_19 and deteriorating consumer confidence that is impacting on the viability of iconic retailers like #Seafolly, it is the growth of discount department stores, fast fashion retailers, and consumers who don't want to pay for quality. @9NewsAUS @TheTodayShow pic.twitter.com/SOVDQbfw13
— Professor Gary Mortimer 🛒🛒🛒 (@ProfRetail) June 29, 2020
The administrators say for now it is business as usual for the retailer, which recently reopened all stores as coronavirus restrictions eased.
“All Seafolly gift cards and the popular Beach Club Rewards points will continue to be redeemable at all Seafolly stores,” Scott Langdon from KordaMentha said.
In 2014, private equity firm L Catterton Asia bought a controlling stake in Seafolly from the Halas family.
It is the latest fashion brand to collapse, following a slew of retail casualties through 2019 and the start of 2020.
In recent months, rival swimwear brand Tigerlily called in the administrators, as did denim brand G-Star Raw.
Retail sales have rebounded from the sharp pullback seen in April as panic buying subsided.
Preliminary figures from the Australian Bureau of Statistics (ABS) show retail turnover surged 16.3 per cent in May.
There were large rises in spending on clothing, footwear and accessories compared to the previous month, but it remained well below the levels of May 2019.
An ABS survey released on Monday indicates spending on clothing and footwear could remain subdued, while people plan to start spending at cafes and restaurants and on recreation again.
The survey found 44 per cent of people had reduced their spending on clothing and footwear while coronavirus restrictions were in place, and 52 per cent of those expect to continue to spend lower amounts on these items as restrictions ease.