Following its voluntary business rescue in August, Frame Leisure Trading, which runs The Cross Trainer, XKids, and XTrend, is at risk of liquidation, Moneyweb reports.
The company entered business rescue on 14th August 2024.
However, the latest scoop from Moneyweb states that on Wednesday (16 Oct.), business rescue practitioners George Nell and Gideon Slabbert told all relevant parties that their investigation into the company’s finances revealed no realistic chance of recovery.
An urgent liquidation application was filed in the High Court in Pretoria on Thursday (17 Oct.) and is set to be reviewed.
In a hopeful twist, BusinessTech shares that a group named Connecting Creativity has made an R80 million offer to rescue the company and its stores. Reportedly, the group submitted the offer three weeks prior to the High Court filing.
Should the deal proceed, Connecting Creativity will acquire the company’s remaining stores, using a large portion of the R80 million offer to settle with landlords and replenish stock.
With everything unfolding, the court papers also contain an order from PUMA South Africa, directing the company to stop selling and displaying PUMA products at its stores—although a later agreement with the practitioners resolved the issue.
The company faced increasing pressure from creditors, including stock suppliers and financiers, as overdue accounts led them to use security claims like ownership reservations, cutting off credit. This strain was further worsened by new mono-brand stores from Nike and adidas, which directly impacted the retailer’s revenue.
Other factors such as the COVID-19 economic impact, shifting consumer trends, and heightened retail competition, along with tighter payment terms from suppliers, contributed to its financial troubles.
Alongside other challenges, The Cross Trainer has shut down its online store at www.crosstrainer.co.za, removing its digital sales channel.
Nel informed Moneyweb that the Cross Trainer had been operational for 29 years and started the year with 391 employees, a number that has since dropped to 175.
He added that the 56 retail outlets active at the start of the business rescue (in August 2024) process have now decreased to only 19.
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