Fashion retailer Tuchuzy taps McGrathNicol for administration

15 June 2020 3 min. read

Australian designer fashion retailer has fallen into financial hardship, forcing the company to go into voluntary administration. 

The Sydney-based retailer is working with experts from consulting firm McGrathNicol to “get the company back on track”, said Tuchuzy founder Daria Sakic. She founded the retailer in 1995, and under her wings the company grew into one of the better known premium fashion retailers for women in New South Wales.

Tuchuzy sells clothes, shoes and accessories of international and Australian designers such as Anine Bing, Alexander Wang, Chloe, Givenchy, Jean Paul Gaultier, Mara & Mine, Rag & Bone and Saint Laurent, both in its Bondi-based store as well as through its website. 

The voluntary administration sees the company “continue to trade as normal” said Sakic. “It’s not a shutdown. At the moment we’re still operating, our customers are still in there, we’re still online. And we’re just working out how we can get out of this hole.”

Tuchuzy enters voluntary administration

Meanwhile, McGrathNicol’s restructuring consultants Barry Kogan and Katherine Sozou have been quick to cut back on costs. “We have had to make a few changes under the direction of administrators to ensure the successes of Tuchuzy through this period,” Sakic confirmed. 

The firm has relocated from its Mascot headquarters back to its Bondi store, and the team has been cut by more than half. To optimise its working capital position, Tuchuzy is no longer accepting gift cards or vouchers at its online store, and the firm has launched a discount campaign to bring in more revenues while enabling its back office to get rid of some stock.

The voluntary administration comes amid a challenging period for retailers of all sizes operating in any segment. The rise of e-commerce already brought many retailers into trouble, and in New South Wales, the situation was exacerbated by the bushfires. For many, the coronavirus pushed many off the cliff, following the forced lockdown and fallout of demand amid an economic crisis. 

In an email sent to customer and stakeholders, Sakic cited a difficult retail environment and coronavirus as the reasons for calling in administrators. “Corona made it all come to the surface 10 times quicker. It’s been a dramatic year for everyone. There was no fighting back because it wasn’t a normal retail environment.”

The announcement comes hot on the heels of a slew of other high-profile Australian retailers that have folded in 2020, including denim chain Jeanswest, Handbags and accessories chain Colette Hayman, denim icon G-Star and fashion heavyweight PAS Group.

Behind the scenes, McGrathNicol is working on an assessment to determine the best way forward, which includes “a sale of the business as a going concern or recapitalisation by way of a Deed of Company Arrangement,” stated Kogan and Sozou.

“We all hope that this restructure will lead our business to a better and stronger future. If we do come back, we’ll come back stronger than ever,” concluded Sakic.