The Griffith Jeanswest has shut its doors. Photo: Griffith Central Facebook.
Creditors for collapsed clothing brand Jeanswest say laid off employees can expect to receive their full entitlements, after $15 million in revenue was raised during closing down sales.
Parent company Harbour Guidance Pty Ltd announced it had entered voluntary administration in March, meaning all 87 Jeanswest store across Australia have now stopped trading. More than 600 employees were left out of a job.
Across the Region network, outlets closed in Tuggeranong, Bega, Wollongong, Albury and Griffith.
Concerns were raised for displaced employees, after the collapse of fashion giant Mosaic Brand saw clothing stores such as Katies and Autograph shut and saw workers left out of pocket for several months. The Federal Government intervened to pay them through a safety net scheme, but some are still owed unpaid annual leave, long service leave and redundancy pay.
However, in the case of Jeanswest, the administrator Pitcher Partners Melbourne has announced workers are expected to be paid 100 per cent of the more than $4 million they were owed by the company.
The company’s director, George Yeung, presented a Deed of Company Arrangement (DOCA) at a second creditors meeting on Friday (27 June).
If the DOCA is accepted at the meeting, Harbour Guidance will come out of administration and control will be returned to the directors.
Under the proposed DOCA, Jeanswest employees will be returned 100 cents in the dollar, including owed annual leave, long service leave and other entitlements.
According to Pitcher Partners Melbourne, Jeanswest employed 220 full-time, 155 part-time, and up to 307 casual employees.
Liz Purtell and Sharon Brown have had to spend months fighting for their unpaid entitlements since their Autograph store closed last year. Photo: Oliver Jacques.
The bulk of these employees stayed on during the sales, which netted the company more than $15 million during the eight-week closing down sales campaign in April and May.
Mr Yeung thanked Pitcher Partners Melbourne, inventory specialists Gordon Brothers, and Jeanswest’s team members for their commitment across the past few months.
“We regret having to pursue this course of action, but we were left with very few options but to restructure as sales in our stores were below expectations,” he said.
“When we are out of administration, we will begin work on a new business model and the next chapter for Jeanswest.”
Administrator Lindsay Bainbridge said the employees were the heroes of the sales campaign, despite the difficult circumstances.
“The results of the sales campaign exceeded all expectations, which has allowed team members to be paid all their entitlements,” he said.
“This is a great result for Jeanswest employees. Given the pressure of a wind-down, the team’s composure and commitment were the key drivers of that performance.”
In its analysis of Jeanswest’s financial difficulties, Pitcher Partners noted that the company’s business model was heavily reliant on bricks-and-mortar retail, through its 87 retail stores around Australia.
“Many stores were underperforming, and with the weak retail environment across Australia and consumers not spending in the stores, there was little prospect of recovery while retaining the current operating model,” Mr Bainbridge said.
Mr Bainbridge confirmed that external unsecured creditors (parties that didn’t have any security or assets in the company) would only receive two cents for every dollar owed, which he said was unfortunate given they were owed about $13 million, but it was the only option in the circumstances.
“If the DOCA were to be rejected and the company liquidated, it is likely that unsecured creditors would receive zero,” he said.
It’s been a horror time for a retail clothing sector this past 12 months, with fashion empire Mosaic Brands going into administration in October 2024.
Its outlets Autograph, Katies, Rivers, Rockmans, Crossroads, W.Lane, BeMe, Millers and Noni B have all shut their doors – leaving 2800 mostly female employees out of a job. The parent company owed creditors more than $250 million, so has thus far been unable to pay its employees entitlements such as annual leave and long service leave.
The Albanese Government intervened to pay employees through a taxpayer-funded safety net scheme, though some former employees have told Region they are still waiting for payment as at late June.
