The financial problems of a Noosa-based women’s activewear business have been revealed, with the company owing creditors an estimated $13 million.
Exotic Athletica Pty Ltd, which operates the e-commerce clothing business Exoticathletica, appointed administrators on April 9.
A first meeting of creditors was held on April 23, with the minutes from the meeting stating four creditors had claims totalling $647,454.
But an administrators’ report to creditors by SV Partners dated May 19 has revealed debts totalling more than $13 million, including more than $114,000 in employee entitlements.
The liabilities include $6,709,159.33 owed to the Commonwealth Bank of Australia as a secured creditor and $6,213,945.45 to unsecured creditors.
Among the unsecured creditors is more than $800,000 owed to the Australian Taxation Office; more than $416,000 to D & J International Limited, which is understood to be a swimwear manufacturer in China; Dongguan Huachen Sporting Goods Co Ltd, which is claiming $447,813.50; more than $726,000 to Meta Platforms Inc; and more than $557,000 to e-commerce company Shopify Inc.
The employee entitlements include $37,733.55 in superannuation and $37,345.25 in annual leave.
“At the time of our appointment, the company employed four staff. No staff have been terminated during the administration,” the report says.
According to the Exoticathletica website the business was founded in 2014 by Leilani Chandler. It briefly had an outlet at Sunshine Plaza that opened in 2019.
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The administrators’ report says the business is continuing to trade and a buyer is being sought via an expressions of interest campaign.
“We have continued to trade the business to preserve its value, with the aim of maximising the return to creditors,” it states.
“This strategy has allowed the business to remain operational, thereby maintaining its goodwill, customer relationships and employee engagements.
“If a sale of the company’s business is able to occur, we anticipate it is likely to result in a greater sale price for the company’s assets than would otherwise be achieved if all of the company’s assets were sold in a piecemeal manner, by private agreement or public auction.”
The report also outlines some of the company’s general financial health.
“Our preliminary investigations have identified the company incurred losses for the three financial years prior to the administration,” it says.
“We note however, based on our preliminary review of the financial information available to us, the company appears to have maintained sufficient working capital to meet its due and payable debts until June 2024; after this time, the company accrued taxation liabilities and debts to trade creditors.
“As a result, it appears likely there would be a possible claim for insolvent trading against the director if the company is placed into liquidation.”
SV Partners issued a media release yesterday saying the business was trying to find a way forward.
“Exotic Athletica has built a loyal customer base and strong community following, known for its bold, body-positive activewear designs,” it said.
“In recent years, Exotic Athletica has faced significant challenges, such as changes in senior management and increased operational expenses. However, these hurdles also present opportunities for growth and innovation, paving the way for a stronger and more resilient organisation. These factors contributed to the decision to enter voluntary administration, with the objective of identifying a buyer to continue the much-loved brand.
“Exotic Athletica remains fully operational, and customers are encouraged to continue to support the business as it trades through this period.
“SV Partners is working closely with Exotic Athletica and its key stakeholders to maintain operations while conducting an expression of interest campaign for the sale of the business. Interested parties are encouraged to contact SV Partners.”
A second meeting of creditors is scheduled for May 27.
