June 14, 2011 / 6:42 AM / 7 years ago

Australia's Colorado retail chain to close

MELBOURNE, June 14 (Reuters) - The receivers of Australian clothing and footwear retailer Colorado Group will close 140 stores, cutting 1,040 jobs, the receivers said in a statement, the latest in a series of closures in a deep retailing slump.

Colorado Group, owned by Affinity Equity Partners, surrendered control of the business to its lenders in April, owing about A$400 million ($425 million).

Receivers Ferrier Hodgson said the closure of the Colorado stores would eliminate the loss-making Colorado stores, while the group’s other 280 stores including JAG, Diana Ferrari and Williams would stay open.

“The remaining brands and stores are all profitable and would form the cornerstone of the future business,” said the statement emailed to Reuters.

Ferrier Hodgson said binding offers for the remaining brands were finalised at the end of May and were being considered, with a decision not expected till the end of June.

Colorado is the second private-equity-owned store chain to collapse in Australia this year after REDGroup. Earlier this month, the remaining Borders bookstores, owned by Pacific Equity Partners’ REDGroup, closed with the loss of more than 300 jobs.

Colorado’s lenders included Mizuho Corporate Bank , National Australia Bank and several hedge funds. (Reporting by Victoria Thieberger; Editing by Ed Davies)

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