The $140 Million Collapse of Colette by Colette Hayman
Synopsis
Colette by Colette Hayman grew into a $140 million fashion accessories retailer with nearly 140 stores across Australia and New Zealand. But rapid expansion, high rental costs, weak consumer spending, and mounting debt pushed the business into administration twice before its final liquidation in 2025.
After almost a decade of retail success in Australia, Colette by Colette Hayman was very close to the Australian fairy tail. The local fashion accessories company made headlines for taking over shopping malls around Australia and New Zealand with its trendy hand bags, jewelry, wallets, sunglasses and luggage at bargain prices. As it grew quickly, opening stores in almost every major shopping centre and becoming a company of well over A$140 million in yearly revenue.
Behind this rapid expansion, however, lay a business model reliant on stores and costly mall leases. With the change in consumer shopping habits as many moved online they fell behind. The store was eventually then lured into a financial crisis when rises in cost, stagnant sales, and increasing debt weighed heavily.
In 2020 the brand went into voluntary administration, survived under new ownership but then collapsed again just four years later. All these stores had closed down by May 2025, but hundreds of jobs were lost, and one of Australia’s highest-profile accessory brands vanished from shopping centres.
Beyond the tragic failure of a fashion retailer, Colette is a story. Quick expansion, high fixed costs and limited financial flexibility can turn a success story into a cautionary business case; it demonstrates.
Company Background, Building a Fast Fashion Accessories Empire
It launched in 2010 by entrepreneur Colette Hayman, who built up the jewellery empire Diva. Her stores catered to a new market in cheap fashion accessories for young women, offering what was then the latest item making its way up the charts, but served at price points girls could get into.
It happened at an extraordinary rapidity, this business grew. In a matter of years, Colette had spread all across Australia and New Zealand. The company, which peaked at approximately 140 stores in 2020 and a permanent staff of over 300 together with casuals, was generating gross sales in excess of A$140 million per annum.
Most stores had been located in major shopping centres. That strategy had worked so well when malls saw the footfall. Another reason they kept the number of physical stores so high is that 2 keep up with brand recognition; if you visit the mall, there’s always a Colette outlet there.
Nonetheless, the same strategy later emerged as one of the most important weaknesses for the company.
The Trap of Rapid Expansion
Speed to new stores soon made Colette one of Australia’s largest accessory retailers but also created ongoing financial liabilities for every new store opened. The rents, workers, goods and materials required for electricity, maintenance and marketing. They needed to be covered regardless of sales levels.
The company relied very much on malls. As changing consumer purchasing habits and increasing online competition began to slow customer visits, many shops were generating lower levels of sales while their rental costs remained high. High fixed costs combined with falling revenues created cash flow pressure.
Retail companies usually work based on a combination of bricks and mortar and online sales. When you were at Colette, the online boom was in full bloom and stores were going big. More customers started comparing prices on the internet, or instead of going to malls, had begun purchasing accessory items from overseas marketplaces.
It had developed a magnificent retail network, but it was also becoming unwieldy. The large store footprint that was supposed to give it a competitive edge, instead became an albatross.
The First Collapse (2020)
As of early 2020, Colette was experiencing some dire financial issues. The firm had struggled amid a weak retail environment and could not raise further funding necessary to continue trading, administrators said. December 2017, the firm slipped into voluntary administration, and in February last year.
This put over 300 permanent staff and approximately 140 stores at risk when the firm collapsed. In the first instance, administrators kept stores trading while finding buyers and investors who could salvage the business.
The restructuring was painful. Eventually, over 100 stores were shut down, shrinking the network to just 35 locations in Australia and New Zealand. As a measure to survive, the firm cut about 600 jobs, including casual workers.
The brand struggled and was sold to new investors later in 2020, but the damage was done. Customers vanished, stores shrunk a ton in size, and the brand was still in need of consistent sales growth to bounce back.
A Second Chance that Didn’t Last
Following its exit from administration, Colette changed hands and then became part of Marquee Retail Group. With a smaller store network and better operations in its sights, the plan was to rebuild.
The comeback looked good for a while. Fewer stores came with reduced operating expenses, while the prominent brand still brought in faithful followers. Others have fared much better after a restructure, leading many to believe Colette could do likewise.
The retail environment only grew more complex post-pandemic. Inflation rose rapidly, interest rates climbed higher and people began to cut back on these more luxury products like bags and clothes.
From October 2023 to March of the following year, however, sales dropped much quicker than expected. The rapid onset of cash flow issues was driven by lower customer spend.
The Second Collapse and the Ultimate Liquidation Phase (2024-2025)
Marquee Retail Group finally succumbed to years of poor sales performance, increasing operating costs and continued financial pressure when it was placed into voluntary administration in April 2024. Administrators again tried to save the business by restructuring and talking to creditors.
Unfortunately, the rescue efforts failed. Colette was put into liquidation in May 2025 and all remaining stores ceased trading for good during BBC News. Around 400 workers are expected to be impacted as about 40 stores close their doors permanently.
In order to get cash, there were HT nationwide stock clearance sales for 60% -80% discounts. These helped draw in price-conscious shoppers, but also ended the brand’s in-store existence.
It marks the end of a retail career that started with a bang but ended in two administrations and total liquidation within five years.
Financial Numbers
Colette by Colette Hayman indicated a disparity between short-term sales and equity but not long-term financial stability. Once upon a time, the company had A$140 million plus annual gross sales and over 140 stores across Australia and New Zealand.
Yet a substantial part of its revenue was locked to a huge physical store estate with most overheads inflexible, including rents, wages and stock. These costs remained relatively untouched as sales slowed, adding more strain to the company’s cash flow. This made it very hard to pay all the expenses and save for the business to grow.
The company downsized its store footprint and aimed for a turnaround with fresh ownership, following the initial rollout in 2020. However, as the months expanded forward into late-2023 and early-2024, higher inflation, greater rates of interest and falling consumer spending sent sales tumbling once more.
Rescue proposals after the company went into administration for a second time, underscored the magnitude of its financial woes. Suppliers were only getting a partial payback of funds owed to them and creditors suffered serious losses. These numbers made clear that the company lacked sufficient value or cash flow to fully support its debt obligations.
Financial Mistakes that Caused It to Fail
Arguably, the greatest mistake was growing too fast and beyond what the business was safely capable of handling. Strong sales growth in the past would lead to a large store network, but its very largeness and strength became an albatross if market conditions changed.
The other thing the company did is very much wavered its business around shopping centres. Some physical stores became less profitable as consumer behaviour began to move online. Even with the stiff headwinds of customer traffic drying up, rent was elevated.
A third problematic area was debt and cash flow. The company had little to no margin for error when sales went cold. Suppliers were to get only 20 cents on every dollar owed under the restructuring plan for 2024, landlords up to 10 cents and most other unsecured creditors as little as five cents.
Rather than one disastrous problem, Colette simply had a lot of smaller ones that all came home to roost at once: plummeting sales, skyrocketing rent, falling consumer spending, inflation; rising interests rates and debt.
All in All
Within less than a decade Colette by Colette Hayman had built one of Australia’s fastest-growing fashion accessories brands. Having 140 stores and $140 million in annual sales, along with a strong presence across Australia and New Zealand, it looked like a retail success.
But fast growth, dependence on malls, high rentals and increased financial pressure gradually eroded the company. Surviving its first tenure in 2020 was one thing, but changing consumer spend patterns and inflationary pressures raising interest rates would ultimately be too much of a challenge for the retailer to recover.
So says the fall of Colette, which demonstrates that just because a company grows doesn’t mean it has to stop being successful. Long-term success is a result of Sustainable growth, financial discipline and the power to adapt when the markets move. Entrepreneurs, retailers and business students are all put on notice by Colette that not being nimble and scaling too fast can doom the best of businesses.
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At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
