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Fashion label Shakuhachi still angering consumers as second liquidation begins

Lucy Cormack
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It was once a beloved Australian fashion label worn by the likes of Lana Del Rey and Rihanna.

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The dress that never came

Nikki wanted the perfect dress for a friend's wedding last December. So to be safe, she placed her order for a dress by Australian label Shakuhachi more than a month early. It never arrived.

But things are looking grim for the decade-old Shakuhachi, with a second associated business now in liquidation – taking the total debts owed to more than $1 million – and the brand's founder facing possible investigation for trading while insolvent.

The brand has appeared on six of the past seven NSW Fair Trading Complaints Registers, with nearly 200 combined complaints and inquiries related to a failure to supply products, the quality of goods and refunds not being provided.

So Fairfax Media made its own purchase of a $99.50 Shakuhachi dress on May 24, which had a specified delivery time of three to five days.

Eighteen days later, nothing has been received and inquiries about the garment have gone unanswered.

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Shakuhachi's founder Jessica White is the former director of Shakuhachi Limited, which was placed under voluntary administration in May 2015.

In March a Fairfax Media exclusive revealed Ms White was living in Bali, the home of the brand's only remaining bricks-and-mortar store.

According to the liquidator's report, more than 80 creditors are owed in excess of $860,000, but Ms White maintains there are no liabilities attributed to her personally.

Liquidator Andrew Spring told Fairfax Media in March that any insolvent trading claim against Ms White would be at least $476,397.

"There is no doubt I tried my best to keep Shakuhachi Limited in operation, however after many business issues occurred, we could no longer do so," Ms White said, adding that she was forced to step back from the business after the loss of her child.

She said she now acts only as a "designer and creative adviser," and did not leave Australia due to the liquidation, but had lived in Bali periodically all her life.

Since 2015 the fashion label's operations have been handled through a seemingly tangled web of different companies.

When Shakuhachi Limited was placed under liquidation in May 2015, all business assets, including the brand and the online store, were purchased by Loft HK Limited in Hong Kong.

Meanwhile a company named Emporium Clothing Pty Ltd – of which Ms White is also the director – appeared to utilise the online environment of Shakuhachi, while administering customer invoices.

Emporium Clothing also held the Australian Licensing Agreement for Shakuhachi. However on April 26, it too went into liquidation.

Liquidator Steven Naidenov said there were 35 creditors to Emporium Clothing, with a combined total of approximately $315,310 outstanding.

He is currently investigating "potential breaches by [Ms White] and such findings will be reported to the Australian Securities and Investments Commission."

Ms White told Fairfax Media that Emporium Clothing was forced to liquidate after attention on the brand earlier this year led to "a distinct downturn" in sales.

She denies any allegations that "I, or any of the companies I have been director of, have engaged in any type of phoenix activity."

A spokesman for NSW Fair Trading said no further action would be taken against Emporium Clothing, as it is under external administration.

"Fair Trading is currently inquiring into whether a different company may be operating under a similar name," he said.

In a statement Loft HK said it was working closely with Fair Trading, and disputed the amount owed by the former Shakuhachi Limited, saying the correct figure was "closer to half that amount".

Meanwhile some Shakuhachi customers have received Paypal refund invoices from another company, Two Strike Apparel Pty Ltd, registered on March 23 this year. Its director is Ms White's close associate Jovy-Anne Fletcher.

Ms Fletcher said there was no relationship between Shakuhachi and Two Strike Apparel, and any refund notices from the company related to a one month period when it held a licensing agreement.

NSW Minister for Innovation and Better Regulation Matt Kean said Fair Trading was continuing to work with the liquidators to get the best outcome for affected consumers. He added that the department was "looking closely into whether a different company may be operating under a similar name."

"I've also directed NSW Fair Trading to continue to work with government agencies to mitigate and deter fraudulent phoenix activity [across multiple sectors]."

Northern Beaches resident Erin Christie said she had to hassle Shakuhachi for a $144 refund when her garments never arrived earlier this year.

"It felt like they were stealing from you ... like they were lying to you, because they would promise it would arrive on a certain day and it never would."

Charlotte Howells, who works in the fashion industry, said she was "baffled" a business could "get away with" running as Shakuhachi has.

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