UPDATE: Cue Clothing has reported a staggering operating loss of $4.6 million for the 53 weeks ending June 30, 2024, marking a dramatic shift for the women’s fashion retailer just ahead of its takeover. Sales plummeted 12 percent to $49.6 million, raising urgent concerns about the future of the business.
The sharp decline in sales, highlighted in the Australian Financial Review, comes as founder Rod Levis prepares to sell the family-run business to British asset manager Hilco Capital this April. This sale follows a series of distressing developments, including the collapse of the previously profitable Dion Lee brand, which was sustained by a $20 million loan from the Levis family.
Justin Levis, Rod’s son, expressed feelings of betrayal over the sale, claiming he was blindsided by his father’s actions. He had left Cue just weeks before Dion Lee’s administration, escalating the family rift. “I felt deeply betrayed and deceived,” he stated publicly.
As the retail landscape grows increasingly challenging, Cue’s struggles reflect broader trends, with other notable retailers like Jeanswest and Mosaic Brands also facing significant difficulties. While sales in Australia faltered, there was a slight uptick in New Zealand, indicating regional disparities in consumer behavior.
The company had previously enjoyed a profit of $1.3 million in 2023 but was unable to cope with rising rent costs coupled with slashed marketing budgets. The operational losses underscore a pressing need for strategic changes as the company awaits a new CEO to replace Simon Schofield, set to depart in August 2024.
The Levis family’s ongoing legal issues are also set to unfold in court later this week, as their high-profile solicitors were forced to step down due to a conflict of interest. This adds another layer of uncertainty to the future of Cue Clothing.
As the fashion retailer navigates this tumultuous period, the implications for employees, suppliers, and loyal customers are profound. The next steps in this unfolding story are crucial, with the potential for further changes in leadership and business direction looming on the horizon.
Stay tuned for updates as this situation develops, impacting not just the brand but the entire fashion retail sector.
