Troubled retailer owes staff $1.25m
EMBATTLED menswear retailer Ed Harry owes staff $1.25 million but will continue trading while administrators try and find a buyer.
The company went into voluntary administration on January 15 after a tough Christmas sales period for the 87-store chain. Queensland is its biggest market with 22 stores and 124 employees.
"We have seen a really positive response from customers since our appointment," said administrator Brendan Richards of KPMG.
"This highlights the strength of the Ed Harry brand and indeed the strong levels of customer loyalty Ed Harry has developed since 1993."
At the first creditors meeting on Thursday it was revealed that Specialty Mens Apparel, which trades as Ed Harry, owes $8.65 million to 651 creditors. This includes $1.25 million to its 498 staff, excluding potential redundancy claims.
It owes 33 landlords $2 million, 20 secured creditors $4 million and 100 trade creditors $1.4 million.
Mr Richards also confirmed a sale of business campaign has commenced and there are a number of parties who have expressed interest to date.
"We remain hopeful that a sale of business campaign will result in a positive outcome for Ed Harry's employees and key stakeholders" said Mr Richards. "In addition, we would also like to acknowledge employees, trade creditors and a number of landlords who have provided support which maximises the prospects of a strong outcome for creditors."
The administrators have continued a clearance sale of existing merchandise with further reductions now added. Gift cards are being honoured for one month on a dollar-for-dollar basis.
KPMG said it was too early to make a determination on any potential return to creditors. "Any potential return to creditors will be dependent upon the success of the sale of business or inventory realisation program and the order of priority of creditor classes as determined by the Corporations Act," Mr Richards and fellow administrator Gayle Dickerson said.