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G-Star Raw Enters Into Bankruptcy in Australia

G-Star Raw made an unexpected move for its Australia business. The Dutch denim brand has entered into voluntary administration in Australia, despite reportedly not experiencing any major debt.

Reported by, the decision leaves an uncertain future for G-Star Raw’s 57 stores across Australia and 200 employees.

Ernst & Young’s Justin Walsh, Stewart McCallum and Sam Freeman have been appointed administrators of G-Star Australia Pty Ltd. and are said to be “conducting an urgent assessment of the company’s affairs and will determine the strategy for the administration as soon as possible.”

In a statement to the news outlet, the administrators named major commercial landlords as the company’s most significant creditors.

“Traditional retailers were already facing business challenges before COVID-19,” Walsh stated. “COVID-19 has certainly increased those pressures. We expect that as lockdowns are lifted and various levels of government stimulus take effect, retailers will experience an uptick, however the impact remains significant.”

The Australian operations of G-Star Raw previously went into voluntary administration in 2015.

States and territories in Australia, which has 97 reported deaths from COVID-19, are easing restrictions since the country shut its boarders to all non-citizen and on March 19, but it’s too late for some businesses to recover from the fallout. Since the start of 2020, Australian department store Harris Scarfe shut more than 20 stores and several specialty retailers have collapsed. Jeanswest, a denim chain store with 146 stores in Australia, also entered voluntary administration, citing online competition and tough market conditions.

The denim supply chain, brands and retailers are suffering major blows by the measures put in place to slow down the spread of the coronavirus.

Los Angeles-based True Religion was among the first brands to succumb to the pressure brought on by the major disruption to business. The company filed its second bankruptcy petition in three years. BLDWN, the brand formerly known as Baldwin, shut down operations entirely in March. Gap Inc. put off $115 million in rent payments as cash dried up in Q1. Meanwhile, thousands of back-office retail employees at companies like American Eagle Outfitters, Levi’s and Rag & Bone remained furlough.