Urgent assessment of the business: New revelations emerge following shocking liquidation of popular Aussie fashion chain after unable to pay rent
New details have emerged after one of Australia’s most popular retail brands was hit with a wind up order from the Federal Court forcing the closure of at least 51 stores.
Ally Fashion, an Australian-owned brand launched in 2001, has more than 150 stores in New South Wales, Victoria, Queensland, South Australia and the Northern Territory.
About 250 staff employed across the stores have lost their jobs due to the shocking collapse of the brand.
Last Friday, the brand received an order from the Federal Court to be wound up due to insolvency issues.
The Federal Court of Australia then appointed Jeff Marsden and Duncan Clubb of BDO Australia as liquidators of Ally Fashion Pty Ltd.
In a statement BDO revealed the appointment by the Court was made following an application by a landlord regarding overdue rent.
Ally fashion, one of Australia’s most popular brands, has been hit with a wind up order from the Federal Court, creating another massive ripple in the country’s retail industry. Picture: Supplied
“Following an urgent assessment of the business by the Liquidators, we have ceased operating 51 retail stores to improve the financial viability of the Company,” a spokesperson for BDO said.
However, the company has reportedly entered into a Licence Agreement with a related entity of the Director, David Dai, to continue to operate the remaining stores of Ally Fashion.
According to its website, clothes at Ally Fashion are designed by an in-house team for women who “like to express themselves through fashion & style”.
“With over 50 new styles arriving per week, Ally Fashion is well in demand and the destination for women who can transcend the fashion’s boundaries – defying the trends and creating her own,” it previously said.
Liquidator Jeff Marsden said, “Ally Fashion is a well-known Australian brand, with a dedicated team. The closure of underperforming stores and entering into a Licence Agreement will allow the business to continue operating in the short term whilst we urgently explore options to restructure, recapitalise or sell the business.”
The news comes as Australia’s retail industry takes a tough blow from cost-of-living pressures and recent inflation, making it increasingly difficult for businesses to meet their financial obligations.
Embattled fashion empire Mosaic Brands, which boasted brands such as Autograph, Noni B, Katies, Millers, and Rivers went into voluntary administration on October 28.
All 80 Katies stores shut down following the major decision, with 80 other stores across Millers, Rivers and Noni B also expected to close their doors.
About 480 employees lost their jobs due to the closures.
A shift in consumer behavior as thousands cut back on non-essential spending is understood to have led to the rise in insolvencies and businesses entering administration across all industries.
