Riot Art & Craft online business sold to ‘related entity’ prior to liquidation
The liquidator of art supplies retailer Riot Art & Craft confirmed that the company’s e-commerce arm was sold to a “related entity” before the business collapsed.
Riot arts and crafts closed its 56 stores last week, after going into liquidation and informing staff members by SMS that they were no longer employed.
A post on Riot Art & Craft’s website claims the e-commerce side of the business continues to operate “under new management,” however, former company employees questioned independence new owners.
Riot Art & Craft online business is now operated by a company called Riot Stores Pty Ltd.
According to the Australian Business Register, Riot Store Pty Ltd has been active since January 2020. The terms and conditions page on the Riot Art & Craft website also refers to another entity, a trust, which has been active since April 2020.
Liquidator Nicholas Giasoumi of insolvency firm Dye & Co was appointed to handle the liquidation of SLKALT Pty Ltd, the company that operated the Riot Art & Craft business, on October 19.
Wednesday he confirmed SmartCompany the company entered into a “sales contract in April with a related entity to purchase the e-commerce business operated by the company”.
This related entity has “joint directors” with SLKALT Pty Ltd, confirmed Giasoumi, although he declined to disclose who these directors are.
The company’s intellectual property assets are believed to be part of the sale, including the Riot Art & Craft name, but Giasoumi has confirmed that no physical stores were sold.
Details of the sale will now be considered by the liquidator, although he says at this point that it appears that an independent assessment was carried out prior to the sale and that it “appears to have been done above the board” .
“There is no indication that creditors have been disadvantaged,” Giassoumi said, although a proper investigation is still being carried out.
SmartCompany contacted Michael Kurc, director of SLKALT Pty Ltd, for further comment, but referred all questions to Giasoumi.
Over the past week, former Riot Art & Craft employees have shared their shock upon learning of store closings via text message, along with repeated assurances that more stock will be filling nearly empty shelves.
“They continued to reassure us, even the week before the manager emailed us, saying the stock was on their way,” former employee Sophie Newcome told nine.com.au.
“What angers me the most is that in the last few weeks we started working as usual, hoping to get paid, but we weren’t.
“This is after the last fifteen weeks spent in what was almost an empty store telling customers that stock was arriving this week.”
This article was updated at 8:00 a.m. on Thursday October 29 to include additional information about Riot Stores Pty Ltd.