DSG Holdings purchases Retail Adventures as Administrator investigations continueDOWNLOAD
12 February 2013: DSG Holdings Australia Pty Limited (DSG) has purchased the business of Retail Adventures Pty Limited (Administrators Appointed) as a going concern.
Retail Adventures is a discount retail chain operating under the Crazy Clark’s and Sam’s Warehouse brands.
Deloitte Restructuring Services Partners Vaughan Strawbridge, David Lombe and John Greig were appointed Joint Voluntary Administrators of Retail Adventures Pty Limited on 26 October 2012.
Contracts were exchanged on 11 February 2013 for the sale of the business for $58.9 million.
Mr Strawbridge said the DSG offer was the highest received following a public sale process.
“This is a positive outcome,” he said. “The sale will ensure jobs are retained for approximately 4,700 employees, with many stores located in regional areas.
“Trade with key suppliers will also continue, landlords will retain tenants, and the network of more than 210 stores will continue to serve local communities and customers.
“The sale process is, however, complex and time will be needed to fully transition supplier contracts, leases and employees to DSG. As a result, a licence with DSG will continue as new leases and contracts are finalised.
“DSG has also been covering entitlements for employees who have been made redundant to date. This will continue, and the purchase price has been adjusted for employee entitlements assumed and monies paid to the Administrators to cover redundancies paid.”
There are still 131 leases yet to be agreed with landlords. The terms of the sale require an extension of the convening period for the second meeting of creditors to allow for these negotiations to take place. An application to court will be heard on 20 February.
Mr Strawbridge said he expected a Deed of Company Arrangement would be put forward which would need to result in a better return to creditors than in the event Retail Adventures was placed into liquidation.
“The ultimate likely recovery for creditors is unknown at this time and forms part of the Administrators ongoing investigations,” he said.
NB: See our media releases and research at www.deloitte.com.au
Follow us – @DeloitteNewsAU