Federal Court puts 10-year-old fashion retailer into liquidation but designer says it’s “business as usual”

The Federal Court has ordered a South Australian fashion business be liquidated, after the Australian Tax Office pursued the retail business over $113,000 in debts.

The ATO applied to have Liza Emanuele Retail wound up in July and the Federal Court in Adelaide ruled in the tax office’s favour on September 23, granting the ATO an order to liquidate the business.

However, Liza Emanuele, who founded her eponymous label 10 years ago, has told her customers it will be “business as usual”, as she intends to continue trading a retail store in Hyde Park, South Australia, under a separate business entity.

“I wanted you to be the first to know that in light of today’s events I plan to reorganise my business which will see the ongoing business operating from a simplified structure,” Emanuele said on her website last week.

“One of the group companies will be liquidated as a result and this will finalise the recently reported matters with the ATO.”

“Resolving this will allow me to concentrate on my fashion brand and focus on my retail outlet on King William Road, Hyde Park, which will now operate under one unified entity.”

In a statement issued to SmartCompany this morning, Emanuele says she has “learnt a lot from this process” and “will, of course, take personal responsibility”.

“I am committed to resolve any remaining issues with the ATO and will continue discussions with them,” she says.

“Moving forward I will now be working with the right team around me to help complete the restructure and establish the systems we need to run an efficient and effective back office so that our customers can continue to enjoy the creativity for which we are renowned.”

According to The Advertiser, the Federal Court heard Emanuele was told in April she had 21 days to pay the business’s debt to the ATO or risked facing insolvency proceedings under the Corporations Act.

Deputy commissioner of taxation David Diment reportedly told the Federal Court there had been a “failure to comply” to pay the business’s outstanding debt, which Emanuele subsequently defaulted on.

Emanuele founded her label in 2005, starting out selling women’s fashion clothing before expanding into bridal in 2008. A year later, she opened her Hyde Park retail store.

After the ATO applied to wind up the business in July, Emanuele said in a statement she did not owe any funds to staff, suppliers or customers and all her custom orders were on track.

“I am a long time advocate of South Australia, producing and manufacturing locally which supports the local economy,” she said.

“I am a passionate South Australian and appreciate all your wonderful support.”

In her statement last week, Emanuele again called on her customers to continue to support local businesses.

“I hope you will continue to support me and remind everyone how important it is to get behind your local SA businesses and keep them vibrant by shopping local #lovelocalbuyit,” she said.

SmartCompany contacted the ATO but the ATO declined to comment.