Looks like we have done our dough pCap. Today's AFR:
Collapsed retailer PAS actually made a profit
Sue Mitchell
Womenswear retailer PAS Group eked out a small profit in 2020 despite falling into administration in May after the coronavirus pandemic thwarted attempts to raise $20 million in muchneeded capital.
The group, which owns the Review, Black Pepper and Yarra Trail brands and the Designworks wholesale business, earned about $3.5 million before interest, tax, depreciation and amortisation in the 12 months ending June, compared with $6.4 million in 2019, a report by administrator PwC says.
Retail revenue plunged 43 per cent in February and March and wholesale revenue fell 7 per cent, dragging fullyear sales down about 25 per cent to $221 million.
The administrators – Martin Ford, Stephen Longley and David McEvoy from PwC – blamed PAS Group’s demise on the coronavirus crisis, which prevented the company from proceeding with a capital raising, disrupted supply chains that led to stock shortages, and forced it to close hundreds of stores.
In addition, many of PAS Group’s wholesale customers, which include Target, David Jones, Kmart, Coles, Big W and Rebel, cancelled orders due to delivery delays and weaker trading in their own businesses.
Creditors, who are owed $57 million, have approved deeds of company arrangement for each of the 19 companies in the PAS Group.
The ‘‘transaction support and distribution’’ DOCAs enable the administrators to arrange assets in a way to optimise their sale and defer preferred bids until bidders’ offers are sufficiently unconditional and certain.
Under the DOCAs, secured creditors and employees are expected to receive a 100 per cent return. Unsecured creditors owed $44 million have been told they will receive returns of between 4¢ and 19¢ in the dollar.
The biggest unsecured creditors are landlords Scentre Group, which is owed $5.5 million, and Vicinity Centres, which is owed $2.5 million.
The DOCAs offered the best prospect of preserving employment for PAS Group’s 1100 remaining staff, future trading opportunities for suppliers and maximising asset sale prices, the administrators said.
PwC received expressions of interest from 44 potential buyers, non-binding indicative offers from 12 parties and indicative offers from two parties for the PAS Group as a whole, as well as offers for parts of the group.
Mr Longley said the administrators were now in exclusive negotiations with a preferred bidder for the Designworks business and were in discussions with potential buyers for the retail businesses.
‘‘But it’s fair to say this climate is not the best climate for people to acquire retail store networks,’’ Mr Longley toldThe Australian Financial Reviewyesterday
.‘‘Because [most of] Victoria is in stage four [restrictions] there’s been a reset on what might be achieved.
‘‘Our preference is to have someone come in and take over in October so they’re looking at forward orders for the new year.’’PAS Group’s Jets Swimwear business was sold last month to Seafolly.
PGR Price at posting:
5.2¢ Sentiment: None Disclosure: Held
