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#1 Posted : Tuesday, July 30, 2019 6:59:38 AM(UTC)

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Joined: 5/8/2019(UTC)
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White knight rescues collapased Rosendorff Diamond Jewellers

The Rosendorff fine Cheap Jewelry Websites business will carry on but under new ownership following a deal struck by receivers appointed last month.Insolvency firm KordaMentha confirmed today it had struck an agreement to sell the business set up by Craig Rosendorff in the 1980s to an unidentified WA buyer also involved in the jewellery trade.

The deal, expected to be finalised in two to three weeks, guarantees more than 20 jobs and covers the Rosendorff trading name, stock and intellectual property.Receivers from KordaMentha were put into Rosendorff Diamond Jewellers at the end of April.

The business, which owes at least $4 million to creditors, has shrunk on falling sales in the past three years to just its flagship store in Hay Street Mall.Today’s sale announcement coincided with news the receivers are stepping up a discount sale which has already brought in between $2 million and $3 million.

The West Australian revealed yesterday that administrators from FTI Consulting had identified “irregularities” in the company’s accounts while sheeting home blame for the collapse to the mining downturn.

They questioned a $1.8 million shortfall in stock and four transactions totalling $170,000 where jewellery “left the store without payment”.FTI said “there were limited controls around the accounting and inventory functions, which have led to some anomalies in the financial accounts”.

However, it noted that such irregularities were not uncommon, and there is no suggestion of any wrongdoing by Mr Rosendorff.The firm’s statutory report on Rosendorffs also noted that Mr Rosendorff, who has invested millions of dollars in the business over the past 30 years, had drawn increasing amounts out of the company as its financial situation deteriorated.

Between July 2017 and FTI’s appointment, those withdrawals totalled $1.8 million, including $582,000 in the past 10 months.The administrators says Rosendorffs had been under financial pressure for two years, citing “cash leakage” and a steady decline in sales after 2011, triggered by the end of the mining boom.
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