n. In May, the company quietly sold the SurfStitch and Ginger & Smart businesses, which it acquired in 2018 and 2019, respectively, to an undisclosed buyer.  Alquemie Group is a multi-channel retail investment business managed by private-equity firm ACTA Capital, which was founded by businessman Richard Facioni in 2021. Facioni is the CEO of ACTA Capital and executive chairman of Alquemie Group. According to its website, the only remaining retail investments in its portfolio are General Pants Co, a private label apparel brand called Insight and the license to operate Lego Certified Stores in ANZ.  Now, some industry experts are asking what lies ahead for General Pants Co, which faces intense competition in the youth-focused fashion category and appears to be engaging in heavy discounting.  General Pants Co’s foggy history  Alquemie Group acquired General Pants from the Smorgen family in May 2022 for more than $60 million. At the time of the sale, the stated plan was to merge SurfStitch and General Pants under one umbrella to extract more synergies, given that the two businesses had similar suppliers and customer bases. As part of the acquisition deal, the previous owners of General Pants Co, including Victor Smorgon Group, Phil Staub and Jackie Vidor, reportedly reinvested a significant portion of their proceeds into Alquemie Group for a 20 per cent equity stake and board seat. Not only did Alquemie Group add a new brand to its portfolio and new investors to its board, it got new leadership. Then-CEO of General Pants Co, Sacha Laing, took over as CEO of Alquemie Group, overseeing all the brands in the portfolio. In the initial months following the sale, Laing told Inside Retail that General Pants had been performing well and that Alquemie Group pursued the acquisition, rather than General Pants being put up for sale. However, in its 2023 financial report filed to ASIC, Alquemie Group reported a net loss after tax of $2.01 million in the 12 months to July 2023, compared with a $3.23 million profit the year before. Laing departed Alquemie Group in March 2024 and was succeeded by Scott Evans, who joined the company from Mosaic Brands, where Facioni was and remains chairman, in a ‘continuity of leadership’.  In June of that year, creditor Mainfreight Air & Ocean lodged an application with the Federal Court to liquidate General Pants Co in an effort to recover owed funds. The dispute was reportedly resolved in July. Recently, retail profitability expert Carla Penn-Kahn highlighted what could be signs of trouble at General Pants Co in a post on LinkedIn. “In my late teens and early twenties, General Pants was the place to shop,” Penn-Kahn, the co-founder of Profit Peak, wrote. “Lately, though, I’ve noticed a significant uptick in discounting, a clear sign that trading conditions are tough, and that the multi-brand retail model is becoming increasingly price-driven.” She contrasted this with the other major retail brand in Alquemie’s portfolio, Lego, which she said “commands exceptional customer loyalty, has strong organic demand (low CAC), and doesn’t rely on discounting”.  According to industry expert Brian Walker, sustained discounting could be the result of inventory misalignment, weak full-price sell-through and/or traffic dependency on markdowns. “This behaviour is particularly noteworthy in PE-held businesses like General Pants, where revenue targets can drive aggressive discounting even if it erodes long-term brand equity,” Walker, the founder and CEO of the Retail Doctor Group, told Inside Retail. “In the context of recent exits, it’s worth monitoring whether General Pants is being groomed for sale or propped up for cash flow – either way, excessive discounting may be a red flag.” What it takes to resurrect a legacy retailer  To understand what might lie ahead for General Pants Co, it’s useful to explore why Alquemie Group exited SurfStitch, Ginger & Smart and National Geographic Stores.  A company spokesperson told Inside Retail last month that the sale of SurfStitch and Ginger & Smart was “a major milestone in delivering on Alquemie Group’s ‘Simplify to Grow’ strategy, which management and team members have been implementing in recent months”.  “This transaction allows Alquemie Group to apply 100 per cent focus on the continued growth of core brands as the business moves forward into the FY26 year,” the spokesperson said.  According to Walker, the sale of the two brands likely reflected “a rationalisation of underperforming assets in pursuit of leaner portfolios or liquidity events”.  He noted that both SurfStitch and Ginger & Smart had a niche positioning with limited scalability.  Penn-Kahn observed that the brands had failed to keep up with the changing landscape.  “SurfStitch was a multi-brand operation likely facing margin pressures due to a competitive landscape, with surf brands increasingly strong as direct-to-consumer players themselves,” she explained.  “By contrast, Ginger & Smart may have lost their way in the social selling and influencer era, which has allowed new brands to enter the market quickly and grab significant market share. A great example of this is Dissh.” While the exact nature of the challenges General Pants Co may be facing within Alquemie Group remains unclear, its external challenges are readily apparent. “General Pants is under huge competitive pressure from all angles,” Matt Newell, CEO of retail strategy firm The General Store, told Inside Retail.  “Cotton On Group is attacking from below; Glasson’s is on a rampage with the female market; Shein and The Iconic spearhead a long tail of maturing online fashion retailers – think Showpo, White Fox, Princess Polly, etc.” Newell acknowledged General Pant’s challenging position in the market, but said he believes the retailer “has a great legacy to build from”. “When we look at the best fashion retailers around the world, players like Kith and Palace, they are winning in three key areas,” Newell elaborated.  “Firstly, they are ‘value shifting’ the proposition – effectively going to market with a luxury experience while offering mid-level pricing. Secondly, they are extending the brand experience into adjacent categories like F&B and cultural events. And thirdly, they are infusing their assortment with exciting brand exclusives and interesting collabs, which is key for social media first shoppers.” However, another industry source, who agreed to speak to Inside Retail on the condition of anonymity, observed that most of Alquemie Group’s credibility comes from its success with Lego Certified Stores. “I think they’ve got a very good business in Lego,” the retail expert said. “That, of course, is such a strong brand, and they really are being a distributor. It’s a very different scenario from a retailing perspective, because you don’t have seasonality at play.” Alquemie Group’s ongoing licensing deal with Lego appears to be the only outlier in its shrinking portfolio.