TM Lewin owes $10 million, mostly to entities in the UK, administrators say
TM Lewin’s Australian business owes approximately $10 million to around 70 creditors, according to administrators from EY, who held the first meeting of creditors on Monday.
Most of that debt, approximately $8.6 million, is owed to TM Lewin-related entities in the UK, where the British suitmaker’s owner, Torque Brands, is based.
Torque Brands purchased TM Lewin from Bain Capital in May and announced the closure of all 66 TM Lewin stores in the UK just a few weeks later on July 1.
“The Torque team has worked to assess all available avenues for the business model going forwards, but having done so, has formed the view that TM Lewin is no longer a viable going concern in its current format,” the company said, according to the BBC.
EY partner Stewart McCallum said the appointment of administrators in Australia earlier this month was due to the brand’s collapse in the UK and the impact of Covid-19 on foot traffic in Sydney, Melbourne and Brisbane CBDs, where stores are located.
“Different parts of the retail sector are performing differently during Covid, and have been impacted differently by Covid,” McCallum said.
“In TM Lewin Australia’s case, the reduction in foot traffic in the CBD – as a result of significantly increased working from home – had a material negative impact on the business.”
All five TM Lewin stores in Australia remain closed, though McCallum said the administrators are considering reopening stores in Brisbane and Sydney, with the idea that stores in Melbourne would reopen after stage 3 restrictions lift.
The administrators have yet to commence a formal sale process for the business, but have already received multiple unsolicited approaches, according to McCallum.
A second creditors meeting is scheduled for late October.
TM Lewin is just the latest example of the impact the coronavirus has had on the retail sector. In Australia alone, the past four months have seen Seafolly, Tigerlily, Kikki K, PAS Group, Aussie Disposals and G-Star Raw appoint administrators, citing the impact of store closures and poor consumer sentiment on discretionary spending.
The brand employs around 40 people in Australia, all of whom are receiving JobKeeper.
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