Affinity-backed Colorado Group emerges from receivership

The restructured company will open with A$70 million ($68.7 million) in working capital - A$40 million which is allocated for capital expenditures and more than A$30 million for marketing over the next four years, administrator Ferrier Hodgson stated. Colorado Group's creditors have converted the majority of its A$430 million worth of debt into equity, leaving just A$90 million on its balance sheet, The Australian further reported.

Ferrier Hodgson notes that Fusion Retail's creditors include Nomura, Anchorage Capital Partners, NAB and Ice Canyon.

Kevin Roberts will remain Fusion Retail's CEO. He joined Colorado Group from Adidas, where he was vice president, five months before the company went into administration. Under his watch, Fusion Retail will own 282 shops and the apparel and shoe brands Diana Ferrari, JAG; Mathers and Williams, which were the backbone of Colorado Group. Colorado itself will continue as a footwear brand. In all, Fusion Retail will have 2,200 employees across Australia.

"We have seen this business go from the brink of collapse to emerge from receivership financially stable, with a secure balance sheet and a bright future," Roberts said in the release. "Our debt has been reduced by 75% and now we can get on with the business of growing these brands and making sure they reach their full potential."

Colorado Group went into receivership in March, prompted by "the poor performance of the Colorado-branded stores. The other brands are performing well given market conditions," Ferrier Hodgson said at the time. That news came one month after Pacific Equity Partners-controlled REDgroup Retail experienced the same fate, and was also handed over to Ferrier Hodgson.

The Melbourne-based company was purchased by Affinity Equity Partners in 2006 for A$430 million. According to the PE firm, the transaction was the "first unsolicited public market takeover offer by a private equity firm in Australia, under which control was successfully acquired."

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• Topics
• Consumer
• Australasia
• Affinity Equity Partners
• Nomura Principal Finance
• Anchorage Capital Partners
• Pacific Equity Partners
• Consumer
• Australia
• REDGroup