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Status has been placed into voluntary liquidation
Status has been placed into voluntary liquidation

Jewellery chain collapses owing $3 million

Status, the bold jewellery and watch retail concept, once predicted to have 12 stores, has been placed into voluntary liquidation with debts exceeding $3 million.
Insolvency firm Dean-Willcocks was appointed on Friday 4 October and has issued a draft report revealing the estimated deficiency in the company’s assets to be more than $3.1 million, with unsecured creditors being owed $2.6 million. 

Status was led by former Pandora Jewellery head of marketing Jeff Burnes. The first Status store was opened at Westfield Chatswood in late May 2012. At that time Burnes forecast the launch of a further three NSW-based stores in 2012 and plans for another five to open throughout 2013 with the ultimate aim of 12 stores nationally.

In what appeared to be an encouraging sign, by December last year the company’s store count was ahead of schedule, having opened five stores across NSW in six months. 

It’s understood that when Dean-Willcocks was appointed last week only two stores were still operating. 

Status was a new, innovative retailing concept based on the “bricks and clicks” model where attempts to integrate offline (bricks) and online (clicks) sales rely on internet marketing and social media engagement with world leading in-store point-of-sale (POS) technology.

Burnes said the concept behind Status was to create an in-store atmosphere similar to Apple. And, like Apple, one of the keys to the new concept would be the introduction of advanced POS technology, which integrated all CRM data across online, retail, inventory and fulfillment processes, he said.

“What drives me with this concept is the way we will connect with customers, regardless of whether it’s digital or face-to-face. Making sure staff are well-trained and able to provide relevant solutions – something missing from the majority of shopping experiences today,” Burnes told Jeweller in February 2012. 

Business model studied 
The business model was closely watched by industry observers for two reasons – one, because of its new retailing concept and, secondly, because it was widely known that most, if not all the product was supplied to Status on a “consignment” basis. 

It is understood that a number of suppliers have been caught out, unaware of the new Personal Property Security (PPS) legislation that took effect in February 2012 meaning consignment stock will be taken by the liquidator.

The new PPS legislation has replaced the existing Retention of Title (ROT) laws and once implemented forces suppliers to register security interest on the PPS website if they wish to preserve title over stock supplied on consignment.

It is understood by Jeweller that 8-10 watch suppliers appear on the creditors list, ranging in amounts from $3,000 to $100,000 – some of these are not covered by PPS agreements. 

One supplier confirmed that he believed existing ROT laws and clauses built into credit agreements and invoices covered his consignment stock, allowing him to retain the title on goods yet to be paid.

He was alarmed to discover that once the PPS law commenced, all existing ROT clauses were no longer binding and the liquidator now has a claim on his stock. 

Other jewellery and watch suppliers are expected to find themselves in a similar position unless they registered under the PPS. 

It’s also understood that five Westfield shopping centres are owed more than $200,000 in rent.

Jeweller contacted Burnes and representatives from Dean-Willcocks for comment but at the time of publication neither had responded. 

This latest news follows recent announcements about the closures of two jewellery suppliers, Tuskc and Canate d’Italia. 

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