Thousands of customers may no longer receive their orders from an online furniture and homewares retailer after its administration recommended winding up the company.
Administrators have recommended winding up Brosa after it was sold to Kogan.com for $1.5 million in December 2022 when it fell into voluntary administration.
The company entered administration with $4.3 million in assets but a whopping $24.2 million in liabilities, including $10 million worth of unfulfilled orders.
It attributed the COVID-19 pandemic to causing substantial losses for the company over the past three years.
“Given the material cash flow shortfall, it was not possible to keep the business trading or to make deliveries and so an urgent process for the sale of the assets was held before Christmas,” Brosa’s advisory firm KordaMentha said.
Despite there being $10 million worth of unfulfilled orders by Brosa, which impacts about 2500 customers, administrator Richard Tucker claims Kogan.com is working to send them out.
“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,” Tucker said.
“Kogan is currently working through this process.”
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But not all customers will get their money back or receive their orders.
Tucker said if customers’ orders can’t be located in the warehouses they won’t receive their money back nor the furniture itself.
“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,” Tucker said.
“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.”
Kogan plans to relaunch the business so that customers can continue to purchase furniture.
Employees currently with Brosa will receive their full entitlements as Kogan takes over the company.
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