T.M. Lewin Australia brings in EY to oversee administration

After T.M. Lewin’s parent in the UK commenced a stringent restructuring operation, the Australian division of the retailer has collapsed into administration, jeopardising around 40 jobs in the country. EY has taken on the administration process.

T.M. Lewin is a British online menswear retailer. It was started in 1898 by Thomas Mayes Lewin who opened his first shop on London’s Panton Street. By 2011, TM Lewin had 100 UK stores and outlets, and one year later it launched its first overseas store (excluding Dublin) in Sydney, Australia. The brand’s growing footprint soon attracted the attention of private equity buyers, and following a 2015 deal with Bain Capital, Sven Gaede took over as CEO in 2018.

Unfortunately, as is the case with a huge number of notorious retail collapses in recent years, the purchase of T.M. Lewin by private equity seems to have coincided with a rapid decline in its fortunes. Just as was the case with with Toys ‘R’ Us, Beales, Bonmarché and a host of other high street brands, T.M. Lewin’s ownership responded to a sluggish retail environment by leveraging debt and turning to asset sales, turning a profit on their investment but destabilising the company in the process. The coronavirus lock-down proved to be too much for the company to survive in this weakened state.

T.M. Lewin’s UK wing was subsequently thought to be heading into administration in late May, before Torque Brands, a subsidiary of Stonebridge Private Equity, bought the business in May. The new ownership quickly struck a restructuring deal to avoid administration – but this saw around 600 workers lose their jobs after T.M. Lewin announced it would close all 66 of its UK shops. The firm added that most of its 700 UK workers would be laid off as it takes all of its sales online, to help cut costs.

The stringent restructuring of T.M. Lewin UK has had the further impact of T.M. Lewin Australia collapsing into voluntary administration, meanwhile. According to documents lodged with the corporate regulator, Stuart McCallum, Adam Nikitins and Colby O’Brien, Directors in EY’s local restructuring arm, have been appointed joint administrators of T.M. Lewin Australia in early July.

T.M. Lewin Australia has a staff of around 40 employees in Melbourne, Sydney and Brisbane, and as of yet there are no confirmed layoffs, as administrators confirmed the company is receiving JobKeeper payments. EY administrators are now working with T.M. Lewin’s UK parent to chart a future for the Australian operation, amid the ongoing effects of the Covid-19 pandemic – something McCallum said was the cause of the Australian business’ collapse.

Speaking to SmartCompany.com.au, McCallum said, “There would not be too many business people in Australia without a T.M. Lewin shirt, suit or tie in their wardrobe… This is another unfortunate example of a retail business which has needed to call in administrators because of the impact of Covid-19… We are working with the administrators of T.M. Lewin in the UK to ensure the Australian business has the best chance of continuing in Australia, and the potential impact on employees, landlords and other creditors remains at the forefront of our thinking.”