Australian influencer's online fashion brand goes out of business.
The Covid-19 pandemic is to blame for the failure of a popular online fashion brand that was started by an Aussie social media star with 1.5 million followers.
A popular Australian eyewear brand that sold online has gone out of business and owes $2.3 million. This is because the Covid-19 pandemic made the market tough.
Late on Thursday, online store Soda Shades, which is sold on The Iconic, went into voluntary administration. Rahul Goyal and Kate Conneely of KordaMentha Restructuring were named as administrators.
In 2018, social media influencer and entrepreneur Steph Claire Smith and her business partner Josh Miller started the company.
Steph Claire Smith has 1.5 million people who follow her on Instagram.
It's thought that these founders no longer work for the company and had already given it to investors before the retailer went bankrupt.
One of the joint administrators, Mr. Goyal, said, "The business failed because of problems with the supply chain."
The company's administrators want to sell it so that they can pay off their debts.
Mr. Goyal said, "We think there will be a lot of people who want to buy such a new label."
"We have good stock on hand, marketing ready to go, and a large number of people following us on social media. This is a great chance for anyone who wants to buy."
The administrators want to sell the whole brand if possible so that the debt can be paid off and all of the affected creditors can get their money back.
The administrators are still asking creditors to file claims, and they think that the total debt could go up.
Soda Shades has almost 50,000 Instagram followers and has sent products all over Australia and to the US and Canada.
The price of a typical pair of sunglasses is $95.
The company's best year for sales was the year before, when it made $1.3 million for the 2021 financial year.
Based on the average price, that means the company sold about 13,000 items.
But problems with the supply chain, made worse by Covid lockdowns that lasted for months, meant they couldn't move products, and their debts grew quickly.
In the first week of September, there will be a meeting of creditors.
Soda Shades joins a long list of other Australian businesses that couldn't make it through the economic crisis and had to close for good.
This week, news.com.au reported that a court had told Victorian construction company Snowdon Developments to go out of business.
Sneakerboy, a store that sells expensive shoes, put itself into voluntary administration last week. Over the past three years, more than 10 creditors had asked the company to shut down.
A grocery start-up called Send that said it could deliver food in 10 minutes also hired administrators in May. The company's failure was blamed on world events like the Covid-19 pandemic.
Australia had a whopping 3917 liquidations or administrations in the last financial year, which ended on June 30 and was reported by news.com.au. These happened in all industries.