Factory outlet chain and women’s clothing manufacturer collapse

The dire state of Australia’s retail sector has claimed another two victims, with Sydney-based retailer Fashion Factory Clearance and women’s clothing manufacturer, designer and retailer Covers Design entering administration and liquidation respectively.

Both matters are being handled by Sydney-based accounting and insolvency firm Jirsch Sutherland, which began advertising Covers Design for sale today.

Records from the Australian Securities and Investment Commission show Covers was placed in the hands of administrators on December 21 and was handed to liquidator Stewart Free from Jirsch Sutherland on February 14.

According to the advertisement for the business, Covers Design trades in six locations in Queensland, Western Australia, Victoria and New South Wales. Some of the outlets are based in David Jones stores.

The business has had average annual sales of $4 million during the past three years and has been run by the Taff family for more than 40 years.

One of the company’s outlets in Adelaide has been closed down since the appointment of administrators but the remainder continue to trade.

Jirsch Sutherland manager Otim Oluk said most of the stock held by the business when it collapsed has been sold off, but expects some interest from rag traders in the business name and goodwill.

“People in the industry will know that the Taff family have been behind this business for 50 years,” he said.

Fashion Factory Clearance, which has outlets in the Sydney suburb of Liverpool and the towns of Picton and Campbelltown, was placed in the hands of administrator Rod Sutherland on January 18.

The second meeting of creditors is to be held on February 22.

Fashion retailers are having their margins squeezed at both ends at present. Savage discounting across the market has put pressure on retail prices while rising labour costs in China and increasing cotton prices are forcing wholesale prices up.