Jeanswest, the iconic Australian fashion brand, has announced a major stock sale after entering voluntary administration. The company, once a dominant name in the Australian retail landscape, now faces a shift to an online-only model. The sale, which includes over $20 million worth of stock, will run through its physical stores and online platforms.
Company Enters Voluntary Administration
Jeanswest entered voluntary administration last Wednesday, marking its second time in administration since 2020. The brand’s parent company, Harbour Guidance Pty Ltd, appointed Pitcher Partners Melbourne to handle the process. The company is now working to wind up its remaining 90 physical stores across Australia, as it pivots to an online-only operation.
Massive Stock Sale to Clear Inventory
The company has slashed prices on over 350,000 items of stock, including 138,000 pairs of jeans. A significant portion of the inventory consists of 77,000 new clothing and footwear items, which had been ordered before the company entered administration. These items have only recently arrived in warehouses. According to administrator Lindsay Bainbridge, storewide discounts will apply, and sales will be final.
Figure 1: Jeanswest will hold a sale of more than $20 million worth of stock from today
“We have spoken to all staff and will continue to operate all stores at this stage while we run out of the stock,” Bainbridge said. “Everything is reduced and sales will apply both at retail stores and online. All sales will be final during the closing event.”
Impact of Market Conditions
Jeanswest’s decision to close its physical stores comes after a prolonged struggle to revive the 53-year-old brand. Despite efforts to stay afloat, the company could not overcome the ongoing challenges faced by the retail sector, including rising living costs and inflation. According to Bainbridge, the company’s decision to pivot to online retail was inevitable, given the current market conditions.
“We have spoken to all staff and will continue to operate all stores at this stage while we run out of the stock,” Bainbridge added.
Job Losses and Closure of Stores
Jeanswest’s move to close all Australian stores will result in the loss of over 600 jobs. The company has made it clear that it regrets the impact of the closures on its employees and customers. However, the focus now remains on clearing the stock and restructuring the business as an online-only entity.
A Shift in Retail Landscape
The collapse of Jeanswest adds to the growing list of Australian retailers struggling to maintain their physical stores. Ally Fashion, another prominent Australian fashion brand, entered liquidation in February, leading to the loss of 250 jobs. Last year, Mosaic Brands, which owns brands like Katies, Millers, and Rockmans, also went into voluntary administration, resulting in the loss of over 3,000 jobs.
“The issue with nostalgia of course is people who grew up in the ’80s and ’90s are now in their 50s and 60s and aren’t buying that product any longer, and the new generations are shopping elsewhere,” Professor Mortimer said.
Sale to Maximise Returns for Creditors
The goal of the stock sale is to maximise returns for creditors and prepare the business for its new online-focused future. The sale aims to clear stock quickly, providing discounts for shoppers while helping the company restructure. Gordon Brothers, a global asset management firm, has been appointed by the administrators to assist with the sale.
“This is the perfect storm,” Professor Mortimer said, referring to the combination of factors affecting companies like Jeanswest. “Older, mid-tier fashion brands don’t really have a point of difference between them. I can buy men’s chinos in about five different retailers including the discount department stores.”
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Moving to Online-Only Operation
Jeanswest’s shift to online-only retail reflects the broader trend in the Australian retail industry. The growing importance of e-commerce has forced many traditional retailers to rethink their business models. While the closure of physical stores marks the end of an era for the brand, the focus now turns to online operations.
The first meeting of creditors will be held virtually on April 4. During this meeting, creditors will consider whether to appoint a committee of inspection, which will work closely with the administrators to represent creditor interests.
The Future of Jeanswest
The future of Jeanswest remains uncertain, as the brand grapples with a challenging retail environment. Despite the nostalgia surrounding its 1990s denim roots, the company has struggled to stay relevant in an increasingly competitive market. With physical stores closing, the focus will now be on the success of its online retail strategy.
“We have spoken to all staff and will continue to operate all stores at this stage while we run out of the stock,” Bainbridge said.
The company’s collapse is a stark reminder of the ongoing difficulties faced by retailers in Australia. As the cost-of-living crisis continues to strain consumers, companies like Jeanswest must adapt to survive in an increasingly digital-first world.
