The company owes overdue debts to the Australian Taxation Office:the report outlines $915,000 in tax provisions.

Alquemie underwent a restructure in June 2023 that resulted in redundancies and a “reduction in its costs of doing business”,the benefits of which will be realised “moving forward”,according to the financial report.

Between 2022 and 2023,operating expenses almost doubled to $139.7 million. The company also owes $46.9 million to third-party suppliers and contractors.

Some creative professionals engaged by Alquemie,such as photographers and models,have told this masthead of their struggle to have their invoices paid by the company,an issue acknowledged in the report.

“The group has significant amounts within trade and other payables which are outstanding beyond normal commercial settlement terms,” it stated.

Alquemie Group declined to respond to comprehensive questions put by this masthead,but a media spokesperson for the company said it was focused on certain brands,such as Lego,as a key growth area going forward.

Commonwealth Bank did not provide Alquemie with a formal waiver regarding the banking covenant breaches on June 30 and September 30 in which $20.8 million in bank loans were classified as current liabilities and technically due now.

But the bank has amended loan terms to extend the overdraft facility from $2 million to $3 million as well as providing an additional seasonal overdraft facility of $5 million,guaranteed by Alquemie’s shareholders. The two parties are in discussions to renegotiate existing loan terms,banking covenants and facility limits.

The company’s management team has established cash flow forecasts for the next year,though this will depend on a strong November and Christmas trading period.

“Should the group’s cash flow forecasts not be achieved,or support from CBA or its creditors not continue,the group retains the ability to take additional measures,which may include capital raisings,further renegotiation of financing covenants and facilities,additional debt financing or further cost curtailment,all of which the group has a history of achieving,” the report said.

Alquemie bought fashion label Ginger&Smart from founders Genevieve and Alexandra Smart in 2019,and in 2022 the brand slid in and out of voluntary administration as Alquemie Group sought to release it from expensive leases.

Late last year,Alquemie Group was in meetings with listed equity investors to assess interest in a potential float to the ASX,as reported by theAustralian Financial Review.

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