Australia’s Sneakerboy Luxury Streetwear Chain Files for Bankruptcy – Sourcing Journal

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Australian luxury footwear and streetwear chain Sneakerboy was placed into administration—an equivalent to filing for Chapter 11 bankruptcy in the U.S.—amid mass complaints from consumers and claims of unpaid debts by various creditors.

Sneakerboy, which sells sneakers and boots from luxury brands like Alexander McQueen, Balenciaga, Margiela and Moncler as well as Nike, Asics and Canada Goose, currently operates four retail stores in Australia and an online store. The retailer recently closed its Brisbane store in April.

The seller has gotten plenty of heat from angry customers in recent months, with TrustPilot reviews giving the company an average of 2.3 out of 5 stars. The company’s Melbourne flagship store has a 2.2 rating out of five stars across 275 reviews on Google. Consumer complaints pushed the retailer to restrict comments on its Instagram page.

Many of the complaints relate to consumers not getting their online orders shipped or they refund they asked for, or a lack of communication after the purchase.

“I placed my order five months ago. However, I still [have] not received my order and I requested my refund one month ago,” reviewer Timson Ding wrote in a one-star Google review of Sneakerboy in May. “The Sneakerboy team emailed me that my money will be backed to my original payment in 10 business days. It has been more than 30 days. I didn’t get my money back.”

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The concerns were similar to those U.K.-based fashion retailer Missguided, which also recently fell into administration before being scooped up by Frasers Group. In this case, Missguided’s administrators said they were unable to refund unfulfilled orders or accept any refunds after the ownership switch, inciting a flurry of angry responses on social media.

On its website, Sneakerboy confirmed it is in administration, saying that all orders placed after July 2 will be fulfilled by the administrators moving forward. All consumers who ordered prior to that date are advised to contact Hamilton Murphy directly via phone to sort out the purchase.

Stephen Dixon of Hamilton Murphy Advisory was appointed as Sneakerboy’s voluntary administrator. Parent company Luxury Retail Group and its four entities are also being put into administration alongside Sneakerboy. Luxury Retail Group is operated by directors Theo Poulakis and Nelson Mair.

Creditors are advised to submit their proof of debt to Dixon by July 12. The first creditors meeting will be held on July 13. At this meeting, details will be provided to all stakeholders related to the financial and structural position of the companies.

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Dixon will assess Sneakerboy’s ongoing viability and whether it can continue to operate as a going concern. Sneakerboy and its sister companies have previously held discussions with parties who have expressed interest in the purchasing the business, according to Hamilton Murphy. These discussions are now being “urgently escalated,” the administrator said, though it didn’t detail Sneakerboy’s potential suitors.

The website for Luxury Retail Group is currently unavailable, stating that a new page will be launching soon.

The voluntary administration appointment stems from Sneakerboy’s short-term financing difficulties, according to the insolvency specialist. The retailer had been on the hook from the Australian Taxation Office (ATO) for as much as $1.2 million Australian dollars (approximately $810,000) as of March 2021.

The streetwear and footwear retailer has noticeably struggled since the start of the Covid-19 pandemic, especially after Australia instituted nationwide lockdowns and closed international borders. With that, many core consumers, including high-spending tourists and students, weren’t shopping at Sneakerboy stores.

The company had received up to 10 applications to dissolve the business over the past three years, including by Adidas, Australia’s Victorian Commission of State Revenue and shopping mall operator Pacific Fair. Adidas had a $148,000 Australian dollars (approximately $100,000) claim that had gone unpaid, while Pacific Fair alleges Sneakerboy failed to pay $292,000 Australian dollars (approximately $198,000) in rent for more than a year. Most recently, working capital provider Banjo Loans sent in its own application to wind up Luxury Retail Group. Banjo Loans’ holding company, FundIT Limited, has an unpaid claim from the Sneakerboy parent.

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A number of other businesses hold security interests over Sneakerboy, including local subsidiaries of Nike and Asics, effectively giving these companies a right to repossess certain items if Sneakerboy cannot pay off certain debt.

In 2020, Sneakerboy took its landlord, Georges Properties, to court after it was locked out of its Sydney store over a rental dispute after it renegotiated leases under the Retail and Other Commercial Leases (Covid-19) Regulation, which provided concessions to retailers forced to close during lockdowns. Lorna Jane similarly wanted out of its store leases as part of its bankruptcy filing last year.

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