Affinity portfolio co. faces administration

According to trade publication Inside Retailing, Colorado Group will see the six-week extension on its banking covenants run out today, forcing it to either pay back its approximately A$405 million debts or go into receivership. The report notes that, whatever outcome for Colorado Group, its operations may be divvied up to make future operations more feasible. The Melbourne-based company is currently owns and operates four popular clothing and footwear brands: Dianna Ferrari, Jag, Mathers and Williams Shoes; in 430 stores in Australia and New Zealand.

Affinity bought and de-listed Colorado Group from the Australian Stock Exchange in November 2006, becoming its sole investor. 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."

In January, local reports noted prior to the extension that Colorado Group might breach its debt covenants. Last month another private equity-owned company faced the same result, as Private Equity Partners-controlled REDgroup Retail, which owns bookstore chains Borders and Angus & Robertson, also collapsed and was handed over to administrator Ferrier Hodgson.

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• Topics
• Australasia
• Consumer
• Affinity Equity Partners