OROTON GOES INTO VOLUNTARY ADMINISTRATION
Written on the 30 November 2017 by Paris Faint
FASHION accessories retailer Oroton (ASX: ORL) has gone into voluntary administration following a rough slide through 2017 which included a 20 per cent share price wipe during a single day of trade in May.
ORL shares have been suspended from trade following the announcement that a strategic review process of the company "failed to secure a viable option" for continuation.
Oroton announced in May that it was struggling to stay afloat amid tough retail conditions and downgraded its earnings as a result.
Following this early revelation, analysts predicted a grim future for Oroton and said the retailer had only two choices; sell up, or quit the ASX altogether.
Oroton then launched its strategic review in an attempt to recapitalise the business which resulted in the termination of its license agreement with GAP Inc. and a 6-month investigation into other viable lifelines.
Interim CEO and managing director Ross Lane said in the end the company made every effort to avoid voluntary administration, however was unable to find an alternative.
"The board is disappointed that it has had to take this step after running such a comprehensive process," says Lane.
"However, having carefully considered the options available to the company at the conclusion of its strategic review, it is apparent that voluntary administration is necessary to protect the Oroton business and the future of this iconic Australian brand."
Oroton has appointed Vaughan Strawbridge and Glen Kanevsky of Deloitte Restructuring Services as joint administrators.
Strawbridge says the administrators' focus is to continue to operate the business for now, while seeking recapitalisation or sale options.
"The flexibility of the voluntary administration process enhances the ability to further restructure OrotonGroup in a manner which makes it possible to achieve the best outcome in these circumstances," says Strawbridge.
Oroton's AGM planned for December 1 will be deferred to a later date to be advised.
Business News Australia
Author: Paris Faint