Stylish online furniture retailer Brosa is set to shut down after collapsing into administration last month.
The retailer’s demise was blamed on the Covid pandemic and sadly there appears to be no chance for the company to recover.
The firm had liabilities of $24.2 million, including around $10 million in unfulfilled orders, with $4.3 million in assets.
Administrators have recommended that creditors vote to wind up the company next week after the Brosa business was sold to Kogan.com.
Eight offers were made to take over the businesses assets, administrators Richard Tucker and Michael Korda from KordaMentha said.
Mr Tucker said: “The offer of $1.5 million from Kogan.com was materially better for stakeholders overall than the next best offer, particularly given it included a solution for about 2,500 customers who had paid for goods which were identified in the Brosa warehouses who would otherwise not have received their items”
“For these customers, Kogan.com has assumed responsibility for delivery of their goods (however can charge a reasonable fee to do so) or provision of a store credit available to be used on any item sold on Kogan.com which will be selling Brosa products in addition to Brosa.com.au. Kogan is currently working through this process.”
Kogan has relaunched the Brosa business via www.brosa.com.au and customers can continue to purchase Brosa furniture.
“Whilst employees should receive their full entitlements, unfortunately there is no return for unsecured creditors including customers whose orders have not been located in the warehouses,” Mr Tucker said.
“With limited cash to trade the business and material amounts owed to suppliers and couriers, there will be some customers who will not receive their orders.
“We understand the extreme frustration for those impacted, however the Administrators have no means to acquire these goods or deliver them as there are insufficient funds to do so.”
According to the Brosa website, the company was “born out of discontent with the status quo, and a desire to change the furniture industry for the better”, with the founders disagreeing that premium furniture had to come with a premium price tag, given “that price is often inflated with mark-ups to accommodate other costs, like importers and wholesalers”.
As a result, Brosa “removed importers, wholesalers and high-end stores from the equation, opting for a completely in-house team that manages the Brosa brand”.
The Melbourne-based start-up was launched by CEO Ivan Lim along with co-founders David Wei and Richard Li in 2014.
In 2017, the company made headlines after raising $5 million in Series B funding, with Mr Lim talking up plans to disrupt the $13 billion furniture industry.
It had more than 60 employees.