Popular shopping centre chains Katies, Millers and Rivers are poised to fall to foreign ownership as weak trading conditions and competition from global players drive corporate activity in Australia's vulnerable apparel sector.
Specialty Fashion Group, which is the largest women's apparel retailer in Australia and New Zealand, has received a $135 million takeover offer or a bid at 70¢ a share for its stable of retail brands from a "Middle Eastern investment company".
One experienced retail investor said he had run the ruler over the Specialty Fashion Group brands some time ago but the price tag for the brand stable was "too big".
Specialty Fashion Group said it had been in discussions with the counter-party for some time in relation to a deal but it said the current proposal remained subject to a number of conditions.
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The takeover negotiations follow the collapse of six high-profile Australian retail brands since December, and warnings from insolvency insiders as well as experienced retailers that there are more retail failures on the horizon.
In the past week, upmarket suit-makers Herringbone along with Rhodes & Beckett slipped into administration, leaving 140 staff facing the loss of their livelihoods as the administrator, Cor Cordis prepares to shut down loss-making stores and lay off staff.
Long-running menswear brand Roger David is the latest chain to get caught up in the carnage, with retail insiders suggesting it has been "shopped around" to potential buyers for at least a year.
Marcs and David Lawrence, which faltered under debts of about $30 million last week, had been quietly put to potential buyers for many months before they finally went into administration and it was the same case for Herringbone and Rhodes & Beckett.
Insiders claim the privately owned Roger David business is under a lot of pressure along with a slew of Australian mid-market brands that are battling to balance rising, fixed costs with stagnant or sliding sales.
Reports emerged this week that APG & Co, the owner of well-known fashion labels Saba and Sportscraft, approached menswear business Retail Apparel Group (RAG) regarding a possible merger of the two operations.
It's understood the proposal was rejected and RAG, which has a suite of menswear brands, including Tarocash, Connor and yd., is pushing ahead with plans for a sharemarket listing later in the year.
The latest Australian Bureau of statistics figures show the price of women's clothing in Australia has fallen to its lowest level since 1989 or when the data was first collected, and job losses in the retail sector are poised to breach 3000 since December, when Payless Shoes and Pumpkin Patch collapsed.
RAG chief Gary Novis hit back at the gloomy sector analysis and said retailers needed to take responsibility and stop blaming market conditions, when apparel retailing had always been tough in Australia.
Mr Novis said the RAG brands had enjoyed a "fantastic" Christmas in terms of like-for-like sales growth and profits.
He said retailers that understood their customers would succeed.
"Retailers that have not reinvented themselves and made sure their product is right aren't going to do well," Mr Novis said.
Roger David was contacted for comment.
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