Fashion retailer, G-Star, has filed for voluntary administration, citing the virus as the tipping point for the business.
Justin Walsh, Stewart McCallum and Sam Freeman from Ernst & Young have been appointed the administrators for the company.
Despite the administration, G-Star houses no debts – an unusual move for the company. “We are now conducting an urgent assessment of the business and will determine a strategy as soon as possible.,” said Walsh.
“At this early stage in our investigations, we have not identified any major debt financing facilities.”
G-Star will continue to trade in the meantime, but COVID-19 has played a heavy role in this decision. “Traditional retailers were already facing business challenges before COVID-19,” he said. “COVID-19 has certainly increased those pressures. We expect that as lockdowns are lifted and various levels of government stimulus take effect, retailers will experience an uptick, however, the impact remains significant.”
G-Star was founded in 1989 in the Netherlands and has 57 stores across Australia. It specialises in raw denim that’s unwashed and untreated.
“Obviously retail has suffered particularly in Australia both before and after the onset of COVID-19, but we are hopeful the myriad of government stimulus packages will see an uptick in retail performance as the economy reopens over the short term,” Walsh explained.
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