Fashion Council into administration

Industry peak body Fashion Council WA entered administration on Friday, four months after private business Perth Fashion Festival suffered the same fate.

HLB Mann Judd Insolvency WA partner Kim Wallman was appointed administrator.

It was not clear how much was owed to creditors at the time of writing, but Business News estimates it is at least $500,000.

The Fashion Council WA had last year operated the Fashion Festival event, after the separate PFF entity ran into financial issues.

Speaking to Business News, Fashion Council chair Richard Poulson said it was very distressing that contractors involved in the 2019 festival had not been paid.

“We’ve had a lot of long-term relationships and partnerships, some providers 15 or 20 years,” he said.

“We’re in this together.

“It’s really unfortunate we got to this stage.

“We (the board) probably worked harder on this in the past 12 months than our own businesses.”

Mr Poulson said the council’s cash flow had been fine until the festival entity went into administration late last year, which created confusion and uncertainty in the market and led to sponsorship drying up.

The big hit had been ahead of the Swim & Resort series, where a sponsor had withdrawn at a late stage and an otherwise profitable event needed to be cancelled.

One of the council’s major creditors is the Perth Fashion Festival entity, which was owed about $460,000.

PFF, owned by Tony Sage and Mariella Harvey-Hanrahan, had been contracted to run the festival and then for the council’s use of intellectual property.

The payments were to be made over six years, Mr Poulson said, with the first installment paid last year.

The cash from the deal would have been used to pay creditors of PFF.

But negotiations between the administrator of PFF and Fashion Council ran aground, and FCWA had argued there was no longer any value in the intellectual property.

PFF creditors voted to put that organisation into liquidation earlier this month, with more than $1 million owing.

That followed the withdrawal of a deed of company arrangement by director Tony Sage just days after a deal to sell part of his stake in the Perth Glory soccer club fell through.

Business News had revealed in January that the Fashion Council had debts outstanding from the September 2019 festival.

Suppliers were owed at least $60,000 in addition to the PFF debt.

Many had been given reassurances they would be paid after not receiving cash from the previous year’s festival, 2018.

As recently as February they were being told to hang tight by then chief executive Steve Ayles, who left that role prior to the administration.

The council had also been pursuing government funding, and received a $20,000 grant for the East Meets West Runway project.

The festival was first established in 1999, with the council created in a later restructure which separated the two entities.

The council became the key body for industry development.

Mr Poulson, who also co-founded retail chain Morrison, told Business News he hoped to continue mentoring young designers and entrepreneurs.