OrotonGroup buyout ends family-owned era

The administrator of iconic Australian luxury handbag retailer OrotonGroup has accepted a purchase proposal from its largest shareholder.

Oroton says Deloitte, which was appointed administrator in November, had entered into a binding implementation deed with a company controlled by fund manager Will Vicars, who owns 18.2 per cent of the firm’s ASXlisted shares.

The administrator did not give full details of the proposed scheme or how much creditors could expect to receive, but said the returns would be disclosed in the deed of company arrangement if one is put forward.

Voluntary administrator Vaughan Strawbridge said that, despite interest, there was no other offer that would have resulted in a better outcome for the business or its employees.

‘‘Our objective has been to avoid a break-up or closure of Oroton, preserve employment and as much of the Oroton business as is viable, whilst achieving a value maximising result for stakeholders. Entering into this agreement is an important first step in implementing a recapitalisation of Oroton,’’ he said on Wednesday.

The deal ends an era for the Lane family, which has owned the business since it was founded by Boyd Lane in 1938. The Lane family had the highest shareholder ownership, with just over 21 per cent, before the 79-year-old company slipped into voluntary administration after struggling with falling sales, a failed Gap apparel venture and a precarious debt situation.

Oroton sank to a A$14.3 million loss in the year to July 29, compared with a A$3.4m profit the previous year, after the brand suffered a 6 per cent fall in key like-for-like sales.

It is only one of many bricksand-mortar retailers to suffer financial strife in Australia in the past year, with Topshop, Marcs, David Lawrence, Herringbone and Pumpkin Patch also hit.

Shares in OrotonGroup, which are suspended from the ASX, last traded at A43.5 cents after having fallen more than 80 per cent in the past year.