Receivers plan to sell 20-year old Andrea Moore fashion label

Fashion designer Andrea Moore in 2013 with former Prime Minister Sir John Key

Receivers for Kiwi fashion brand Andrea Moore will make arrangements to advertise its sale today, following a move by one unknown creditor.

The shareholders of the company moved the iconic label into liquidation on Monday with Wayne Deuchrass and Keith Harris appointed. According to Companies Office records, designer Andrea Moore and managing director Brian Molloy hold a majority 61% share of the company between them.

However, receivers Conor McElhinney and Andrew Grenfell of McGrathNicol were later appointed at the request of a creditor. The receivers have control of the business and say stores will continue to trade as they make decisions about the sale process. The fashion label has seven stores in Auckland, Wellington and Christchurch and employs 22 staff.

In a statement, Mr Molloy blamed the label’s problems on a “perfect storm” with damaging late deliveries, creditor defaults and roadworks outside its retail stores limiting trade.

Mr Molloy acknowledged the company should have considered consolidating its bricks and mortar stores and focussed on parts of the business which were profitable.  

He says the fashion label has a loyal customer base of more than 30,000 but its problems were linked to the hugely capital-intensive nature of the industry, and discounting affected margins.

Andrea Moore had created a fashion following by using bold prints and colour, and in recent years had created a mass market label, “I am,” sold at Farmers outlets.

In August 2016, the label raised $750,000 through crowdfunding site Snowball Effect. At the time it claimed it had excellent historical earnings growth with financial year revenue of $4 million and an ebitda of $300,000.  

Andrea Moore said it was forecasting continued growth in the 2017 financial year, with revenue of $4.8 million and ebitda of $600,000.


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There are risks in any business, but the speed at which some of the businesses that have raised funds via the equity crowd funding platforms have failed (Hydroworks, Balex Marine and this one) and how others have seriously under performed raises some major questions in my mind as to how rigourous the platforms are in vetting deals being presented.

If you look at some of the successful offshore crowd funding sites (Crowd Cube for example) the level of crowd scrutiny of deals can be signifacnt and that in effect reduces the risk or at least allows investors to make a more informed decision. The lack of crowd scrutiny - in a public forum - does increase risk in investing in the local market.

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I believe that crowd sourcing will be a short term phenomenon. Kiwi's don't take well to continued failure. I agree on scrutiny. I looked at one offer on one of the crowd sourcing sites and the responses to simple investor questions gave the impression that the listing of the food company was a 7th grade school project.

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Hi Anon,

Good question regarding the level of vetting that goes on with online equity marketplaces. With respect to the public raises that we facilitate on Snowball Effect, alongside the various equity crowdfunding compliance requirements and necessary disclosures that we make sure are made available to investors, there are a couple of key aspects that have generally been addressed before an offer is made available to the wider public: 

- The company has at least one non exec/independent director that can represent the interests of minority investors. 
- The offer has received solid investment commitment from experienced/wholesale investors who are investing in the round on the same terms as those being offered to the wider public. 

There has been a number of occasions where a company that we've worked with has not been able to attract cornerstone investment from experienced investors that have had a first look at the offer, or the feedback received as part of this process has been such that we have chosen not to take the offer any further. 

Snowball Effect is a marketplace - investors are responsible for their own due diligence. However, for our own reputation, we are looking for reference points that may indicate that an offer has some legs. We recognise that for the industry to be successful, there needs to be some winners in amongst the ones that while they gave it an honest go, didn't get there. 

Regarding the volume of Q&A on offshore platforms such as CrowdCube, my personal view is that the information provided by the companies listed on those platforms can at times be very limited. This may mean investors need to ask a lot questions in order to get an understanding of the business - just a theory. Our aim is to provide fulsome information to investors in the offer docs, but we would certainly welcome more Q&A as part of drawing out the key information from a company raising capital, from which the wider public can benefit, and long term can be a source of education for less experienced investors.

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I am not 100% sure oft he legalities but I think all directors need to act in the best interest of then company not a sub set of shareholders. I also suggest that a number of offers promoted via your platform (and others) look like they have had newly appointed directors (IMO to tick a box).

Just look at the turnover of directors on some of the companies - new directors leaving shortly after the raise is completed.

As for the "wholesale" investor test - maybe fuller disclosure of who those investors are and what "other" interests they have might enlitten some investors. As would the lack of any real track record - the deals done for Powerhouse for example all raise concerns in my view, and which has subsequently been borne out by the share price of that company.

Interesting 2 of the 4 comapnies on your platform (Hydroworks and Balex) where backed by Angel investment groups. You can add in Powerhouse and Motim as two more that have under performed.

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Hi Anon,

Our experience is that most ‘wholesale’ investors in NZ are reluctant to be used as public reference points. This is different than the US (and other markets) where often high profile investors will actively use their profile to help syndicate rounds.

To clarify, Hydroworks didn’t raise via Snowball Effect.

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Apologises re Hydroworks - agree that was an Equitise deal.

If wholesale investors are not prepared to stand up and put their "reputation" on the line then your claim that wholesale investors are backing these deals is largley irrelevant and not in my view any endorsement of the quality etc. I suggest a lot of wholesale investors in fact have limited expertise in early stage or small company transactions.

As can be seen by the failures - being backed by some of our apparently most experienced investors in this space and by what I consider to be stupid valuations - backed by subsequent market determinations etc.

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Two words describe all investing:
Caveat emptor

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Revenue of $4m and EBITDA of $300k?
Hmm......is this normal in the rag trade. Sounds like that is the answer there.

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Equity crowd funding has been tremendously successful in many places. It is actually a perfect place for companies a couple of years old turning over 3-5m (i.e. proven concept) and looking to grow to raise money. As long as the valuation is reasonable it gives investors a chance to invest in business that they ordinarily would not have been able to with the chance of great upside and liquidity

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Do you mean successful overseas or in NZ? The biggest issue for any deal is valuation and there is plenty of evidence that the valuations being promoted in NZ are far too high for the risks etc. Take a look at Powerhouse Ventures as a classic example and some of its investees - valuations have not stacked up for most or all of those companies. And the real losers are the ECF investors.

One of my earlier comments was around the incentives for some of the so called wholesale investors that support these deals. Clealry for PVL it had massive incentive to strecth the valuation of its investees using ECF even if it was investing more funds at the time.

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I agree with the first poster. Equity Crowdfunding is good for investors for investment in the 3-5m turnover mark. It gets you in the door at a good price and their is a chance of good upside. Back the idea, back the team.

Investors cannot have it both ways and they need to take responsibility for their own decisions. They seem to want to take the great potential upside in early stage investing, but dont want to acknowledge any risk. If you want low risk, buy Scales or Port of Tauranga or something

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I was wondering where the earlier poster was referencing when they talked about tremendous success - cannot really point to anything in NZ at this stage, although still early days to be honest.

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