Australian fashion group Kinzu Brands has collapsed amid a disruption in cash flow due to COVID.
Kinzu Brands designs, manufactures and sells designer footwear and fashion accessories under brands Sol Sana and From St Xavier. According to the company’s website, it held wholesale agreements with The Iconic, Revolve, David Jones, Bloomingdales, Myer, Shopbop, The Metropolitan Museum of Art and Selfridges.
Joshua Philip Taylor from Taylor Insolvency in Sydney was appointed as liquidator.
Documents obtained by Ragtrader revealed Kinzu recorded a $3 million drop in overall revenue for FY23, ending March 31. The company’s total income for FY23 was $2,813,970, while FY22 reached $5,837,574.
Kinzu Brands has recorded trading losses from at least FY19, with the exception of FY21 where it reportedly made a profit of $83,388.
As a result of the significant decrease in other income, net loss increased substantially from a net loss of $32,463 for year ending 30 June 2022 to a net loss of $357,454 for year ended 31 March 2023.
Government-mandated COVID lockdowns were cited for the significant downturn in sales and revenue.
A consistent increase in overhead costs, while not being able to pass these on to customers due to “fierce competition” in the industry, was also cited for the collapse. This was in addition to an inability to raise capital in order to market the business for sale and issues with shareholder relations around further financial input.
Amid these cash flow issues, Kinzu Brands reportedly paid $11,000 to a consulting firm in a bid to sell the business.
In a recent update, the company held a value estimate of total creditors at $3,362,452 million with secured creditors sitting at $2,675,648.70. The company accrued estimated realisable debtors totalling $549,523.
Kinzu Brands was placed into voluntary administration on May 2, 2023.