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Rosendorff Diamonds has found a buyer after going into receivership owing more than $18 million.
Rosendorff Diamonds has found a buyer after going into receivership owing more than $18 million.

Rosendorff Diamonds saved at the last minute

A mystery buyer has stepped in to acquire the long-standing Perth jeweller, following its collapse last month.

Receivers for Perth’s Rosendorff Diamonds have announced the business has been sold on behalf of creditors. While details of the sale have been kept private, it is believed the buyer is a local West Australian diamond dealer, and the transaction includes the Rosendorff trading name, stock and intellectual property.

The business – which had been a Hay Street institution for more than 50 years – collapsed last month, owing in excess of $18 million. An administrator’s report lists Rosendorff Diamonds as owing $17.9 million to three companies of which founder Craig Rosendorff is sole director.

The company also owes $2.1 million to Gordon Brothers, an asset advisory and investment firm, and $165,000 to the Australian Taxation Office. Staff were owed $400,000 in unpaid entitlements.

In addition, The West Australian reports that administrators from FTI Consulting found “anomalies” in the company’s financial accounts, including a $1.8 million shortfall in stock – of which nearly $1 million remains unaccounted for – and four transactions totaling $170,000 where jewellery “left the store without payment”.

While there is no suggestion of wrongdoing by Rosendorff, FTI found that he had withdrawn increasing amounts of money from the business in recent times.

The company began to go into decline after the end of the mining boom in 2011 and fell into serious financial trouble in the past two years, closing stores in Claremont and Booragoon. The remaining Hay Street flagship store lost $740,000 in the last financial year.

Following the collapse in May, receivers KordaMentha conducted a $9 million clearance sale, with huge discounts and negotiations offered on big-ticket items.

To date the clearance sale has brought in more than $2 million and will continue while the sale of the business is finalised.

 

More reading:
Iconic Perth jeweller goes into receivership

 

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Wednesday, 19 June, 2019 08:01pm
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