Melbourne jeans label Bettina Liano collapses

High profile Melbourne jeans label Bettina Liano has stunned fashion lovers by falling into administration in another blow to the fragile retail sector that is being buffeted by rising cotton prices and labour costs.

The company declined to comment this morning, referring questions to administrator Ferrier Hodgson.

In a letter to creditors administrator John Lindholm says the administrator at this stage intends to keep the company trading.

In a letter to Bettina Liano’s 90 employees Lindholm said he is assessing the company’s financial position and working on a report on the financial position at the request of the company’s director.

“You will no doubt have concerns about your future and because my work is still at an early stage it is too early to determine what the future might be,” Lindholm said.

For the moment, Lindholm said, the administrator’s task is to take control of the company’s assets, keep the business operating as usual, to advertise the business for sale and to sell the business as a going concern if possible.

Bettina Liano has been in business for 28 years with products distributed throughout Australia, New Zealand, Indonesia and Malaysisa via more than 120 stockists. It also has seven stores across Australia.

Michael Lonie of the National Retailers Association says the news is a surprise given Bettina Liano operates in a niche market.

“Then again that niche is fairly fickle and the younger generation is not as loyal as it used to be,” Lonie said.

“It’s interesting that it collapsed just after Zara arrived.

“I wouldn’t know who would fill their space,” he said, noting the financial difficulties sass & bide had a few years ago before it was turned around and eventually received an investment from Myer.

Lonie says rises in raw commodity prices and the cost of labour overseas were biting some clothes group.

“More importantly they’re indicating that they’re not able to pass on any savings from the high dollar because most orders are being placed when the dollar was about parity anyway,” he said.

“They just can’t pass those costs on.”

A creditors’ meeting will be held on July 20, with creditors including ANZ Banking Group.

It is business as usual at the stores but returns and gift vouchers will no longer be issued.