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Category: Fashion / Business, Economics and Finance

Fashion designer Johanna Johnson suspected of misconduct

Friday, 9 Sep 2016 05:47:55 | Stephanie Dalzell

Fashion designer Johanna Johnson has strongly refuted any accusations of misconduct. (Facebook: Johanna Johnson)

Embattled celebrity fashion designer Johanna Johnson is facing allegations of suspected misconduct by the liquidator assessing her company's finances, a damning report has revealed.

Key points:

  • Johanna Johnson owes $1.1 million in unpaid taxes and employee superannuation entitlements
  • Poor company records, financial control and poor strategic management contributed to company's failure: report
  • Mrs Johnson has refuted accusations of misconduct

The designer's dresses have adorned celebrities like Kim Kardashian and Mad Men's Christina Hendricks, but behind the glittering gowns is a financial mess.

Her company has been pursued in court by the Australian Tax Office and former employees for more than $1 million, and was placed into liquidation in April.

A report obtained by the ABC, prepared for the company's creditors by court-appointed liquidator Timothy Cook, now reveals potential misconduct.

"A liquidator is required to report to ASIC … where potential misconduct is suspected or identified," the report reads.

"I suspect misconduct on behalf of the Director, Mrs Johnson."

Christina Hendricks Photo: Mad Men actress Christina Hendricks wearing a Johanna Johnson gown at the 63rd Primetime Emmy Awards. (Getty Images: Frazer Harrison)

The liquidator also outlined a litany of reasons behind the company's failure.

It states poor company records and financial control were partly to blame, as well as a "lack of business acumen".

"[It] seems Mrs Johnson followed a strategy of expansion (local and international) but lacked the skill to manage and control the rapid expansion," the report said.

The report also lists poor cash flow management and trading losses as contributing factors.

The designer's debt came to light when the company's former head of production Alana Teasal obtained a court order to have the company wound up.

She launched legal action after being owed more than $35,000 in employment entitlements and superannuation.

In a statement, a spokeswoman for Ms Johnson said she strongly refuted any claims of misconduct.

"The liquidator is expressing their own opinion based on limited information they have access to," the spokeswoman said.

"As the matter is before the court, no further comment will be made at this time."

Dresses go under the hammer for $9

A second tranche of Johanna Johnson's dresses are now being sold on auctioning site Grays Online, some with a starting price of just $9.

Dozens of couture dresses, which previously retailed for up to $15,000, were seized when the business went into liquidation.

About 40 dresses are yet to be sold, while 100 dresses were auctioned off for a total of $50,000 in July.

The report issued to creditors states the company's total liabilities are $1.46 million, with the ultimate deficit estimated to total $1.14 million once all assets — including the gowns — are sold.

Ms Johnson has strongly refuted any accusations of misconduct.

"The liquidator is expressing their own opinion based on limited information they have access to," Ms Johnson's statement to the ABC said.

"As the matter is before the court, no further comment will be made at this time."

AustraliaPlus


 

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