Why Surfstitch fell prey to voluntary administration?
Appointment of Administrators: For over twelve months, the businesses of Surfstitch Group Limited (ASX: SRF) have been faced with several significant, external challenges including two class actions, the protracted Coastalwatch litigation and an ASIC investigation. Notably, these challenges have been said to bring high levels of uncertainty and material costs that became outside of the control of the Group operational businesses, while impacting the Companies’ cash flow position. Subsequently, considering the Board’s continuous assessment of the Group’s financial position and as part of its ongoing efforts to optimise business operations, it has been decided to appoint the administrators for listed entity and its holding company (SurfStitch Group Limited and SurfStitch Holdings Pty Limited) respectively. Accordingly, John Park, Quentin Olde and Joseph Hansell of FTI Consulting have been appointed to act as Administrators. However, the Group’s on-line companies, SurfStitch (Aus), SurfDome (UK) and Swell (US), and publishing businesses MagicSeaweed (UK) and Stab (Aus & US) are unaffected by the Appointments and will continue to trade as normal. Customers will continue to receive their merchandise as usual and suppliers and employees will be paid in the ordinary course of business.
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