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Brown Sugar joins growing list of retail chains forced into administration

Brown Sugar, the womenswear group, is the latest retailer to hit the wall this year because of changing trading conditions that have rocked the retail sector and pushed brands including Colorado, Borders and Bettina Liano into administration.

The 40-strong chain, established in 1975, is to continue trading under Sal Algeri of Deloitte Touche Tohmatsu, who was appointed as administrator by the board of owner Associated Retailers yesterday morning.

The problems facing the Australian Retail industry are systemic and are here to stay. At the heart of the problem is the fact that Australian retailers have been extremely slow in embracing Online Trading opportunities – Federal Communications Minister Stephen Conroy stated recently that over 70% of businesses aren’t offering products on the internet, depsite Forrester Research estimates that online retail spending could reach as much as $36.8 billion by 2013.

45% of this revenue is already spent offshore, and the National Retail Association (NRA) warns that the majority of new growth will go to International retailers if local competitiveness does not dramatically improve, estimating that as many as 88,000 retail jobs will be lost over the next 5 years.

Clearly the time has come for Australian retailers to focus their energies on tapping the growing opportunities available by selling online.