The women’s fashion brand, which is owned by General Pants Co. has become the latest victim of a toughening retail market, as it enters voluntary administration.
According to documents filed with the Australian Investment and Securities Commission (ASIC), Petr Vrsecky from PFK Australia has been appointed as Metalicus’ administrator, as news of the brand’s declining financial position goes public.
“Its early stages so there’ still some investigating to do … but fundamentally it’s a classic retail story where wages and rents were far too high for sales,” Vrsecky said.
An initial assessment of the company’s position has reportedly revealed close to $2 million worth of debt, which is owed to a handful of trade creditors and the broader General Pants brand. Metalicus currently operates 12 retail stores, an online store, and 15 Myer concessions, all of which will be liquidated in the coming months.
It’s believed the company’s collapse is largely attributed to growing competitive pressure within the apparel accessories and footwear categories, with each of these areas performing below expectations in recent data released by the ABS on consumer spending across the month of March.
In an email sent out to customers, the company informed shoppers there would be a number of discounts across its entire range in the coming months, as the brand works to liquidate its stock.
“Metalicus has long been recognised as an iconic Australian fashion brand and we would like to take this opportunity to thank our customers for their ongoing loyalty and support over the years,” the company wrote.
The fashion brand is the second retailer based in Australia to announce its fall into voluntary administration in the last week, with Esprit also announcing its exit from the Australian market, with the closure of 67 outlets across the country by the end of 2018.
This seems to be a trend that’s been plaguing Australian retail brands over the past few years, as pureplay and multichannel businesses alike come head to head with the competitive nature of online marketplaces like Amazon, and face increasing discount pressure. This also comes at a time when consumers are spending less on non-essential items, an issue which industry bodies like the National Retail Association hope will alleviate after the Australian Government’s tax offset cut in the latest federal budget announcement.
Metalicus’ decline has come after the brand changed ownership in 2016 when General Pants purchased the business from the former owner, Pas Group.