Popular Dress Hire Platform Faces Financial Struggles
Australian designer dress hire company Designerex has entered administration following a legal dispute with a technology provider. The company, known as the “Airbnb of designer dress hire,” announced the decision on social media, citing ongoing issues with app developer PixelForce.
The Sydney-based business, founded in 2016 by Kirsten Kore and Costa Koulis, had expanded into the US and featured over 44,000 dress listings.
Figure 1: Sydney couple Kirsten Kore and Costa Koulis founded the business in 2016.
Company Announces Administration
Designerex informed its customers, investors, and stakeholders of the decision through a public statement.
“Unfortunately, due to a legal dispute with a technology provider, we have made the difficult but necessary decision to appoint an administrator,” the company said.
“This step allows us to reassess our position, minimise further disruption caused by this provider issue, and explore the best way forward for you – our customers, as well as our investors and stakeholders.”
The company assured customers that it was working toward paying dress suppliers and refunding outstanding customer payments. All bookings through the platform have been paused.
Figure 2: Bookings have now been paused and customers are being refunded.
Lenders Claim Outstanding Payments
Several lenders on the platform claim they are owed thousands of dollars. Brisbane woman Natasha Furner, 45, stated she is waiting for $3,000 for dress rentals since August.
“It’s so stressful because at the end of the day, I’m a mum as well,” she said.
“I started a small business. I’m trying to build my business, and I just don’t have the cashflow. All I’m asking is for them to pay what I’m owed.
“I think they need to take accountability for not paying and come through with action. And to remember that their clients, who are the lenders – their business doesn’t exist without us. Their business will fail without us.”
Other lenders reported similar issues, with some stating they were owed up to $4,000.
Figure 3: Thousands of dollars are owed to several lenders
Dispute with Technology Provider
The administration follows a legal battle between Designerex and Adelaide-based app developer PixelForce.
Kirsten Kore acknowledged the delays in payments, linking them to the ongoing dispute.
“Unfortunately, a significant technology and business partnership dispute drastically delayed our technology development and has had a flow-on impact,” she said.
“Despite these challenges, our team is actively working to resolve any queries as quickly as possible.”
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Efforts to Sell or Restructure the Business
The appointed administrator told Business News Australia that efforts to market the business were already underway.
“We intend to commence a campaign to market the business, whether for sale to a third party or for a restructure of the company as part of the administration process,” the administrator said.
“We have already received expressions of interest in acquiring the platform and customer database.”
Designerex’s Growth and Market Impact
Designerex launched in 2016 as a peer-to-peer dress rental platform, allowing individuals and businesses to lend high-end garments. The platform gained traction through Instagram and Facebook, marketing itself as an opportunity for lenders to earn money from their designer wardrobes.
Figure 4: The Company is also known as “The Airbnb of Designer Dress hire”
The company grew significantly, offering thousands of dresses for hire across Australia and the US. It was recognised for its innovation in the sustainable fashion sector.
In 2019, Kore shared how the business idea emerged after renting a dress from a stranger on Facebook.
Future Uncertainty for Lenders and Customers
With bookings on pause and payments still outstanding, the future of Designerex remains uncertain. The company has committed to working towards full payouts and refunds.
“As part of this process, bookings have been paused,” Designerex stated.
“Thank you for being a valued part of Designerex, and we appreciate your ongoing support and patience.”
Stakeholders Await Further Developments
The administration process will determine whether Designerex can recover through restructuring or if a sale is the best option. Customers and lenders await further updates on the resolution of outstanding payments.
