Australian fashion label Ksubi to be sold for third time

Troubled label Ksubi is to be sold for the third time in as many years as Australia's fashion industry looks to rebuild after 18 months of financial turmoil.

Receiver David Iannuzzi, who controls the once achingly hip brand, hopes to announce a deal with a retail player next week, as fashion industry figures gather for the Melbourne Fashion Festival.

Hopes of a sale come as the liquidator of a separate company that ran Ksubi's eight retail stores considers launching action against the label's previous operator, Mark Byers, for alleged insolvent trading.

Ksubi Copyright liquidator Gavin Moss said he was also investigating whether there had been any uncommercial transactions in the lead-up to the company's collapse in December.

Ksubi collapsed in December following a failed rescue bid by Mr Byers' Bleach Group - part of a wave of collapses, retirements and restructures that has reshaped Australia's fashion landscape. Those who have gone broke or closed down operations include Bettina Liano, Lisa Ho, Kirrily Johnston and George Gross and Harry Who.

Others, including Sass & Bide and Collette Dinnigan, have shut down their expensive stand-alone stores in favour of exclusive deals with department stores David Jones and Myer that often feature cheaper ''diffusion'' brands.

Mr Iannuzzi said a frontrunner to buy the Ksubi trademark had been in talks with Ksubi's major creditor, US private equity fund Breakwater.

It is believed Mentmore, which owns the Ksubi mark, owes Breakwater about $5 million.

Mr Iannuzzi refused to confirm the amount owed but admitted convincing a buyer to pay $5 million for the collapse-prone label would be ''a hard sell''.

The label is believed likely to be sold to a retailer, consistent with an emerging trend of fashion designers moving in-house with department stores rather than striking out alone with their own stores.

''We're busy looking for a locally based partner to look at whether retail is the best way to go,'' Mr Iannuzzi said.

''There's some talks happening at the moment with the frontrunner. They flew to the US recently to get down and dirty with Breakwater.''

In a previously unreported demonstration of the power of the big department stores, Ksubi financial paperwork filed in the US shows that its decision to can a deal with David Jones in 2012 cost it more than a quarter of its sales revenue, which at the time was about $5 million a year.

At the time, Ksubi was in the hands of Bleach, which bought the label for $5 million in 2010 after its founders, Sydney fashion identities Dan Single and George Gorrow, put it into administration.

As part of the Bleach empire Ksubi was profitable in 2012 and 2011, but it had racked up big losses while in the hands of Mr Single and Mr Gorrow.

Ksubi lost $7 million in 2009 and was on track to lose more money in 2010, according to documents filed with corporate regulator the Australian Securities and Investments Commission.

Last year ASIC slapped a three-year ban on Mr Single being a company director. It also attempted to ban Mr Gorrow but was unable to serve him because he was overseas.

Last month, Mr Gorrow was reportedly working with rapper Will.i.am on a new line of sunglasses.

Smartphone
Tablet - Narrow
Tablet - Wide
Desktop