Australian Fashion Labels has entered voluntary administration and is holding “urgent” talks with a potential buyer, according to administrator Duff & Phelps.
The fashion house, co-founded by Melanie and Dean Flintoff, operates labels BKNR, Finders Keepers, C/MEO Collective, Keepsake and The Fifth Label.
According to Marcus Ayres, partner at Duff & Phelps, the business’ employees entitlements and salaries are paid, but it will struggle to continue trading without a deal due to an unrevealed level of debt owed to Bendigo and Adelaide Bank, Tigers Logistics and the Federal Government’s Export Finance Australia.
“This next 48 hours is critical, we’re pretty clear what the position is. We’re trying to lock down all the key suppliers to allow us to continue to trade,’’ Ayres said, according to The Australian. “That’s critical for the next month. There is a suitor in the wings. Based on the preliminary discussions that we believe the director had with this party it would seem like we should make our best endeavours to try and keep the business operational and pursue that proposal.’’
According to The Australian, the business had been operating as online-only in an attempt to pare down operating costs, but that it has effectively no working capital and can’t afford to recapitalise, with the Covid-19 pandemic hindering the sales needed to cover the business’ operations.
Inside Retail has reached out to Duff & Phelps for more information.