Top-end fashion retailer Baubridge & Kay in receivership

The horror year for boutique and high-end fashion continues, with Sydney-based retailer and wholesaler Baubridge & Kay being put up for sale by receivers Grant Thornton after succumbing to pressure from offshore and online retailers.

High-end fashion brands have been collapsing over the past 12 months as consumers opt to save and spend less on luxury items. Satch, Grab Jeans, Ed Hardy, Belinda International and Bettina Liano are just some of the brands that have been placed into administration or receivership this year.

According to receiver Said Jahani, the 22-year old business has been suffering under competition from offshore retailers and manufacturers.

“The company has had quite a strong retail presence over the years, but economic conditions being as they are, they started to exit a number of stores and eventually were down to one store.”

“The key thing that has really impacted them here is that they have tried to be true to their origins. They source quality fabric from Europe, it gets manufactured in China, and comes here.”

The brand has focused on quality shirts in the past, but has moved into womenswear and homewares as well.

However, Jahani says competitors source cheaper fabric from China, and try and cost cut as much as possible. As a result, higher prices can’t compete in such a tough economic environment.

“The exchange rate has made things much more competitive, and from a cost perspective, it’s just hard to compete.”

The company was founded in 1989 by Julie and Philip Chapman, who remains managing director. He was contacted this morning by SmartCompany, although no reply was available prior to publication.

Jahani also said the company was affected by the Westfield development in Pitt Street mall. While the company was relocated and eventually offered a spot back once the redevelopment was complete, Jahani says the rents were just too high.

“They had a flagship store there, and were offered a place back. However, the rent went from being something feasible to something that was quite unsustainable. So they never took it back.”

Many retailers have been complaining of unsustainable rents – a topic that was even addressed in the Productivity Commission’s draft report into the sector.

Both Baubridge & Kay and its accompanying asset, fashion sourcing division Collaboration & Co, are now up for sale, including trademarks and intellectual property. Jahani says he is confident he can complete a sale.

“David Jones is a major customer. The stock is throughout Australia, and we think there is a lot of value here. It’s very well recognised, has a very loyal customer following, and it’s definitely a stable brand.”