Published
Jun 4, 2019
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Digjam begins insolvency proceedings

Published
Jun 4, 2019

The clothing retailer Digjam has begun insolvency proceedings as it faces bankruptcy brought on by softening demand for its apparel.

Digjam has begun its insolvency proceedings - Digjam- Facebook


Following decreasing sales since 2016, Digjam has become bankrupt, TNN reported. The brand began insolvency proceedings in April this year when its directors Meenakshi Birla and C Bhaskar resigned with immediate effect. 

Following the resignations, one of the business’ operational creditors, Oman Inc, filed an application to initiate the Corporate Insolvency Resolution Process on May 3. Oman Inc stated in the filing that the business’ debt amounted to Rs 21.74 lakh ($31,379.52).

The business saw sales decrease by 80 percent during the timeframe of just one year from Rs 15.54 crore in the financial quarter ending in December 2017 to Rs 0.97 crore in the quarter ending in December 2018. The business did not report its financial results for the recent quarter ending in March 2019. 

The insolvency proceedings will eventually lead to the dissolution of the clothing brand. “Demand is particularly affected due to general liquidity constraints in the market, impacted by the time-consuming recovery from demonetization and the disruptions during transition to GST,” the brand’s 2018 annual report stated, as accessed by TNN, providing some further insight into the reasons for bankruptcy.  

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