Struggling surfwear chain, Surfstitch Group, has today entered administration after appointing John Park, Quentin Olde and Joseph Hansell of FTI Consulting effective immediately.
The retailer’s online companies, SurfStitch (Aus), SurfDome (UK) and Swell (US), and publishing businesses MagicSeaweed (UK) and Stab (Aus & US) will continue to trade while the administration process takes place.
Sam Weiss, chairman of Surfstitch, said that the companies “reluctantly made the appointments due to several significant external challenges including two Class Actions, protracted litigation and an ASIC investigation which have brought high levels of uncertainty impacting the companies’ trading position.”
“The administrators have been appointed with the intention of preserving value for stakeholders in the business whilst recapitalisation options are pursued.”
John Park, leader Australia, corporate finance & restructuring of FTI Consulting, said the administrators will work closely with the operating businesses to preserve value for stakeholders.
The below chart details the Group corporate structure and the relationship between the Non-Operating SurfStitch Companies and the operating businesses.
“The legal proceedings against the non-operating SurfStitch companies [Surfstitch Group and Surfstitch Holdings] will be stayed following the appointments, which will provide the Group with breathing space to focus on trading into the critical December peak period.”
“The Administrators will investigate the potential for a recapitalisation of the non-operating SurfStitch companies with the intention of securing a better outcome for stakeholders.” he said.
FTI will provide an update on the progress of the administration at a creditors meeting expected to be held in September.
More to come…
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