Aussie retailers are continuing to drop like flies, with reports OrotonGroup has joined the growing list of high-profile retailers to fall into administration.
Fairfax reported the ASX-listed company, which operated the Oroton and Gap brands, went into voluntary administration after a six-month strategic review failed to identify a viable way forward for the business.
OrotonGroup had been plagued by falling sales, with its 2017 annual report revealing a 10 per cent slide in group revenue and a $7 million loss in earnings before interest, tax, depreciation and amortisation (EBITDA).
The company was also saddled with net debt of $5.4 million.
The figures contrasted strongly with just a year earlier, where EBITDA was said to have a $2.7 million profit, and rather than being burdened by debt, it enjoyed a cash surplus of $2.8 million.
In the chairman’s statement announcing the 2017 results, company chair John Schmoll attributed the souring performance due to “a soft and very competitive retail environment and adverse currency impacts”.
Despite the news of its collapse, OrotonGroup did not post a statement on its website. However, it told the ASX in a statement that the Gap brand would be closed by the end of January 2018, while its Oroton stores would continue to trade as normal.
Deloitte Restructuring Services was appointed as administrator.
“Our focus is on continuing to operate the business, as we seek a recapitalisation or sale of this iconic brand. The flexibility of the voluntary administration process enhances the ability to further restructure OrotonGroup in a manner which makes it possible to achieve the best possible outcome in these circumstances,” administrator Vaughan Strawbridge said.
“Our ambition is that a stronger Oroton business will emerge from this process.”
The news came just days after another fashion retailer, Lover, also went into administration.