Pandemic sends retailer PAS Group into voluntary administration

Australian clothing retailer PAS Group Ltd said on Friday it has entered voluntary administration to review its operations, citing tough financial market conditions as the effects of the coronavirus pandemic continue to unfold.

This marks yet another company facing a bleak outlook as consumers hit by layoffs spend less and stay indoors. Airline Virgin Australia Holdings was the most recent prominent firm that entered voluntary administration. Melbourne-based PAS had suspended operations at all its brick-and-mortar stores across Australia and New Zealand and stood down all retail employees and support staff in late-March when nationwide curbs were put in place to control the spread of the virus.

"Given the issues as a result of unfavorable financial market conditions, the COVID-19 crisis, and the challenges of restructuring in that environment ... The administration was the best way to affect change while protecting all stakeholders," the company said on Friday. PAS, which was listed on the Australian stock exchange in 2014, maintained it was still solvent and that the company had entered voluntary administration with a "strong desire" of a restructuring that would allow it to continue operating.

The company said its stock trading will remain suspended, but stores will continue their operations, and credits and vouchers would still be honored. PAS had already appointed a team of advisers to help pursue restructuring options in April, with the aim of closing unprofitable stores and further reducing costs.

According to its website, PAS owns more than 150 retail stores with brands including Review, Black Pepper Brands, JETS Swimwear and other wholesale operations, and employs in excess of 1,300 employees. Earlier this month, the retailer said it would progressively re-open stores in Australia by the month-end and expects to qualify for government-support programs in Australia and New Zealand.

 

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