In yet another blow to Australia’s struggling retail sector, denim clothing chain G-Star Raw is closing, with the loss of around 200 jobs.
The local operation of the Dutch-based company went into administration in May, citing the difficult trading environment caused by the pandemic and consequent lockdowns.
Administrators hoped for a buyer
There had been hopes that a buyer would be found for the 57 Australian stores, but those hopes were dashed this week when administrators Ernst & Young (EY) announced that they had failed to find a suitable purchaser despite an extensive marketing campaign.
“G-Star Raw is a globally recognised brand,” EY administrators Justin Walsh, Stewart McCallum and Sam Freeman said in a statement.
“The fact that no party was able buy the business reflects the high level of uncertainty regarding the future prospects for the retail sector in Australia.”
Property landlords are biggest creditors
At the time of the brand going into administration, EY reported that commercial property landlords were its biggest creditors.
“Traditional retailers were already facing business challenges before COVID-19. [The virus] has certainly increased those pressures,” EY’s Justin Walsh said at the time.
Last month the brand filed for Chapter 11 bankruptcy in the US, also citing the impact of the pandemic on business operations.
The shift to online has now accelerated
“As a result of this crisis, the previously initiated shift to online has accelerated, at the expense of the performance of physical stores,” a G-Star spokesperson told the UK-based website FashionUnited at the time of the Chapter 11 announcement.
“In order to cope with these structural market changes, it is important that we adjust our retail portfolio in various regions. This does not mean that we will leave these regions; we will restore the balance between G-Star stores, strategic partners and online presence.”
The spokesperson said that the company was reviewing its store base in the US and Sweden. “Our intended end goal is to maintain a smaller healthy retail portfolio that better reflects the current market situation,” G-Star said.