Jeanswest dies

Via the ABC:

Australian-founded, Hong Kong-owned denim label Jeanswest is the latest retailer to enter voluntary administration, with the future of its 146 stores uncertain.

The company employs 988 staff in stores across all states and territories — including 40 stores in New South Wales, 32 stores in Victoria and 28 in Queensland.

Administrators from KPMG have been appointed and say Jeanswest will continue to operate as they consider “all options for the restructure or sale” of the business.

“Like many other retailers, the business has been challenged by current tough market conditions and pressure from online competition,” said James Stewart from KPMG.

Jeanswest opened its first store in Perth in 1972 and expanded to the east coast during the 1980s, before being bought by Hong Kong firm Glorious Sun in 1994.

The Jeanswest brand expanded overseas, into countries including China, Hong Kong, Vietnam, Russia and Indonesia.

In 2017, the publicly-listed Glorious Sun sold the Australian operations to a private company called Howsea Limited, run by its chairman Charles Yeung and vice-chairman Yeung Chun Fan.

The administration only affects the Australian business.

This latest retail collapse follows Bardot’s announcement that 530 workers will lose their jobs as it shuts 58 stores over the next two months, while Harris Scarfe will close 21 stores and cut 440 jobs.

There will be many more as the Bad Santa brings nothing but pain.

David Llewellyn-Smith

Comments

    • Same. But shrinking household budgets have to hit somewhere.

      I wear black Jeans West jeans to work but with cost of living expenses rising faster than my income (EBA is 2% per year for the next four years) the Wife and I looked at a wide range of measures to keep our household budget in the black and one was to spend $16 dyeing my faded, but not worn out jeans and get another six months out of them rather than do my annual ritual of heading to Jeans West to buy two brand new pairs for $110.

      That is just one of about two dozen measures we’ve taken, the household budget balances for 2020 but next year we’ll need to find some more income from somewhere or start cutting back on cherished extra curricular (namely dance lessons for my girls).

      Actually, I just thought of a magic solution to this woe being experienced by retailers! Why not just increase immigration so that we have more consumers? So simple, why didn’t anyone think of this before!!!???

  1. PalimpsestMEMBER

    Any weakness, such as a management buyout creating excess debt, is very clever in buoyant markets, but potentially dangerous in tight conditions. Maybe selling off Australian brands wasn’t so brilliant.

  2. No big deal. Another store enduring a Kodak moment.

    Irrelevant stores die and new stores selling products of the time take their place. Creative destruction.

  3. Jumping jack flash

    The problem clearly was not enough workers who were cheap enough. Cheaper workers are required or we will see more of this.

    Also the problem is the debt is not expanding quickly enough to counter the sucking of the interest. Cheaper and more easily obtainable massive chunks of debt is required or we will see more of this.

    100 billion dollars of productive money (plus debt) every year that could have been used for buying jeans but instead it was given to the banks so they could maintain their own debts, and yes, give a smidgen back as wages and blah blah blah.

    Debt growing at a paltry 2.4% is nowhere close to being able to repay that 100 billion dollars of interest without sucking a decent portion of productive income out of the economy.

    They’ll either move to correct these problems or, hopefully, they’ll announce “this is the recession we need to have because there’s simply too much debt” and then we wait about 30 years.

    • They (treasury/rba) have known about this problem for decades. They are in too deep and won’t let it correct now. Did they let it correct after the GFC? Why will they change their modus operandi now?

      • They have known about it for decades but they didn’t care as long as interest rates, and therefore debt repayments, could be dropped further. Problem is that all the time that meant people would just keep on bidding up prices and the debt repayments that had been reduced by interest rate drops had got back to where they were because of the principal hike.

        Now they have reached the end of the line for that game, but all the problems that they didn’t address, because they didn’t have to, have now accumulated to the point where only significant structural reform will have any chance to fix it. But the government got in the last election by basically saying they weren’t going to reform anything and they’d make everything (somehow) keep going.

    • With the growth rate for the economy lower than the interest rate on debt then debt should increase, unless Australian owned assets can be sold to people outside Australia. Presumably that can continue until nobody in Australia owns anything, only debt.

  4. I love how they complain about having to pay high wages for the 2 people getting $20 per hour for their 6 hour shift, for a total of $240 per day but ignoring the $4000 a week in rent that they pay because of the stupid high price of RE in Australia

    • Yep.

      BTW Where are the job protectors of the government in these cases? Could we subsidise the retail industry to protect valuable jobs?

  5. Jeanswest going into administration is more indicative of losing market share rather than economic conditions. Jeanswest lost its relevancy with the arrival of H&M, Uniqlo etc. Seriously, who buys clothes from jeanswest? If you want budget jeans/clothing you go to kmart, you want something a bit nicer you go to H&M etc

    • Or Just Jeans, a nearly identical business model and product line but a little bit cheaper and a little bit better.

    • Good point.
      I had bought a few of their jeans around 5-10 years ago as they were good value compared to other, trendier brands.
      As middle-age spread set in, they had no sizes bigger than a 44 in jeans and I needed one size bigger.
      So, no more Jeans West for me.
      p.s. If it was easy to lose weight, I would have done it already. Nowadays I put on weight just looking at food.
      Neo-Liberal capitalism compels me to spend more and more time at work. One gets more easily tired as they get older and there is less time for exercise, particularly during Melbourne’s long and dreary Winters.

    • Yeh, I also think that things headed south after they lost the Jeanswest girl.

      They need a new one, that looks like the old one.

      I think they could use Bindi Irwin – she’s also got those weird Caucasian-shanty-eyes look that Chloe had.

      • Guess Jeans peaked with Anna Nicole Smith and Claudia Schiffer in the 1990’s. I’m surprised they are still around.