SurfStitch sinks into voluntary administration
Australia's SurfStitch has gone into voluntary administration, in a move that will see it consider a recapitalisation or restructure, as the firm continues to face both legal and creditor pressure.
The struggling surf and skate wear online retailer on Thursday appointed John Park, Quentin Olde and Joseph Hansell of FTI Consulting as administrators. The move comes just days before the embattled group is due to release its full-year results.
SurfStitch chairman Sam Weiss told local media the administration phase comes at a crucial time, with two shareholder class actions brought by Quinn Emmanuel and Gadens, acting on behalf of major shareholder, Crown Financial Group, as well as an Australian Securities and Investment Commission (ASIC) investigation, hunting down SurfStitch.
With the recent administration news, however, the legal proceedings against the parent companies are to be held following the appointments, providing the group with time and space to focus on sales ahead of Christmas and negotiate with the class action participants and creditors.
SurfStitch Group's namesake Australian e-commerce offering, SurfStitch will continue to sell apparel, footwear and accessories online, as well as its UK site, SurfDome, and its American platform, Swell.
The firm's British publishing subsidiary MagicSeaweed and Stab (Australia and the US) are also unaffected by the appointments and will continue to trade as normal, said the group.
"The administrators have been appointed with the intention of preserving value for stakeholders in the business whilst recapitalisation options are pursued," said Weiss.
According to the Australian Financial Review, administrators are expected to field expressions of interest from potential suitors and new investors.
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