G-Star Australia Pty Ltd. has become the latest retailer to declare insolvency during the coronavirus pandemic.
The Amsterdam-based company today entered into voluntary administration in Australia, where it operates 57 outlets under its brand name, G-Star Raw. The move leaves uncertain the futures of roughly 200 employees amid the COVID-19 outbreak, which has sickened 7,020 people in the country and killed 98.
Ernst & Young’s Justin Walsh, Stewart McCallum and Sam Freeman have been appointed as administrators, who will make an assessment of the company’s business and determine a strategy for the administration. (Its biggest creditors include major commercial landlords.)
In a statement that was shared to local Australian media outlet Seven News, which was the first to report the insolvency, Walsh said, “Traditional retailers were already facing business challenges before COVID-19. COVID-19 has certainly increased those pressures. We expect that as lockdowns are lifted and various levels of government stimulus take effect, retailers will experience an uptick [in sales]; however, the impact remains significant.”
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Founded in 1989, G-Star Raw’s Australia business had already gone into voluntary administration in 2015. The brand has also has flagship stores in Paris, London, Milan and Shanghai, as well as roughly 140 stores in the United States.
Just this year, two other major players in the country’s retail space have also fallen on hard times: Fellow denim chain Jeanswest also entered into voluntary administration due to current market conditions, while Australian department store Harris Scarfe has shuttered more than 20 stores.
Separately, in the U.S., six nationwide retailers have already filed for bankruptcy as the health crisis deepens the challenges they had already been facing. Neiman Marcus and J.Crew, both saddled with billions in debt, entered Chapter 11 proceedings within days of each other. Shoe names Aldo and John Varvatos also sought protection, while True Religion and Modell’s resorted to bankruptcy as the pandemic took hold.