June 29, 2020 / 10:03 AM / 5 days ago

LVMH-backed Australian swimsuit brand in administration due to virus

FILE PHOTO: A LVMH luxury group logo is seen prior to the announcement of their 2019 results in Paris, France, January 28, 2020. REUTERS/Christian Hartmann/File Photo

SYDNEY (Reuters) - Seafolly Pty Ltd, an Australian swimsuit maker part-owned by French fashion giant LVMH Moet Hennessy Louis Vuitton SE (LVMH.PA), appointed administrators on Monday citing a sales downturn from the coronavirus, the latest casualty of the health crisis in the country’s retail sector.

“Seafolly made the appointment because of the crippling financial impact of the COVID-19 pandemic,” said Scott Langdon and Rahul Goyal, of KordaMentha Restructuring, in a statement.

Discretionary retailers around the world have faced store closures and a collapse in consumer spending since governments ordered most businesses shut to slow the spread of the virus earlier this year.

Seafolly’s move into adminstration points to gaps in various corporate relief packages set up by the Australian government during the shutdown, such as a wage subsidy scheme and a deferral of certain financial reporting obligations to help companies stay afloat.

A month earlier, Australian clothing retailer PAS Group Ltd (PGR.AX) hired administrators citing the pandemic. Local media reported in March that Tigerlily, a swimsuit maker rival of Seafolly, also went into administration.

KordaMentha, Seafolly’s administrator, did not give details about the company’s decision to hand over control, but did say it would “immediately commence a sale of business process”.

Seafolly’s current owner, L Catterton, a U.S. private equity firm part-owned by LVMH, bought the Australian company in 2014, according to its website.

The Australian label is sold in 1,200 stores across 46 countries at stores, the website said.

Reporting by Byron Kaye; Editing by Jacqueline Wong

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