ASB MAGAZINE: According to mainstream media reports, Seafolly is set to be saved barely a month after going into administration, with administrators KordaMentha choosing its former owner to take the reins again. Administrators said they had chosen American-owned private equity company L Catterton as the preferred bidder. L Catterton is Seafolly’s largest creditor, owed more than $25 million, but offered to forgo any return in favour of a higher return to the business’ other creditors.
Seafolly entered administration in late June, citing the crippling financial toll COVID-19 was having on discretionary spending and the retail sector. Details of L Catterton’s preferred bid will be sent to creditors tonight, with a vote on the contract to be made at a meeting on August 3.
Administrator Scott Langdon said L Catterton’s offer would provide the best value to creditors of the business.
“I was overwhelmed by the level of interest and competition to own one of Australia’s most recognisable brands,” Mr. Langdon said.
“With an optimised retail, online and wholesale network, Seafolly will continue to be the iconic Australian beachwear brand that customers know and love.
“For customers, all gift cards and reward points will be honored.”
Before it entered administration Seafolly had over 40 stores in Australia and boasted $112 million worth of sales per annum to December last year. Administrators reduced outgoing costs of the business by closing 15 independents but related “Sunburn” stores, re-negotiating ongoing leases and reducing head office costs.
A Seafolly network of 20 stores will remain open and more than 110 employees will retain their jobs. L Catterton beat more than 80 other bidders for the business, comprising of investors, private equity firms and other companies.