Things are looking rather dire for Aussie clothing stores General Pants, SurfStitch, Ginger & Smart as their parent company reported $5.2 million in losses after its revenue and expenses doubled, as well as redundancies and a restructure.
Sydney Morning Herald has reported that in its 2023 financial report, Alquemie Group recorded a net loss after tax of $2,009,000 in the 12 months to July 2, 2023, compared with $3,234,000 profit the year before. Fkn ouch.
“In the event that the group is unable to achieve successful outcomes … a material uncertainty would exist that may cast significant doubt as to the ability of the group to continue as a going concern,” stated Alquemie’s financial report.
Alquemie Group — which also owns Pumpkin Patch, National Geographic Wear, Alphabet Soup and some Lego stores — acquired General Pants in May 2022 for a reported $60 million.
At the time, the group’s revenue doubled to $282.8 million, as did business expenses and the cost of merchandise as well as selling and distribution expenses, which were $52.4 million in 2022 and rose to $104 million in 2023. Meanwhile administration costs jumped from $17.6 million to nearly $34.3 million.
The company also owes overdue debts to the Australian Taxation Office ($915,000 in tax provisions).
In the report, the company’s auditor stipulated that “existence of a material uncertainty that may cast significant doubt” about the company’s ability to keep the stores open.
Anonymous sources who have worked with the brand told SMH that they have struggled to get their invoices paid by the company, which was also outlined in the report.
“The group has significant amounts within trade and other payables which are outstanding beyond normal commercial settlement terms,” it stated.
Alquemie Group has not addressed the report or discussed the probable closure of its brands.
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