Van Laack at war with itself
Since 2015, German shirtmaker from Mönchengladbach, Van Laack, has been fighting with Nelson Mair, the former managing director of its Australian subsidiary Van Laack Australia Holding Pty. Both parties are accusing each other of unfair business practices that have caused major damage to the Herringbone and Rhodes & Beckett brands, which have been majority owned by the German group since 2009 and 2012, respectively.
In 2014, the German parent company found accounting irregularities that it believed were attributable to the Australian management, which prompted the dismissal of Nelson Mair, co-founder of Rhodes & Beckett. Mair, however, claimed that Van Laack had, among other things, dented profits by introducing fabric surcharges in a bid to reduce its tax bill, and that a decline in quality standards damaged the brands. As a result, he announced his intention to step down in early 2015.
At the same time, Mair asked to have an option to sell his 20% stake in Rhodes & Beckett, owned by his Balnaring Holdings Pty company. Based on the 2014 balance sheet, he valued the stake at $3.6 million. But Christoph Neizert and Christian von Daniels, owners of Van Laack GmbH, ended his employment contract and diluted the shareholding of Balnaring Holding. Nelson Mair responded by filing a wrongful termination claim against Rhodes & Beckett Pty and his company filed a shareholder oppression lawsuit, FashionNetwork.com reported at the time.
Van Laack reacted with a counterclaim against Mair, which was dismissed by the Supreme Court of Victoria, Australia this month. The court ruled that Van Laack GmbH and its Australian subsidiary had unfairly dismissed Mair and oppressed Balnaring. If the ruling comes into force, Van Laack GmbH could face a $5 million compensation bill. Furthermore, the heritage German company may also have to pay the court costs, which can be millions of dollars. Van Laack told FashionNetwork.com that no statement will be made while process is ongoing.
Last year, the collapse in Australia cost the German shirtmaker big and prompted the closure of the Australian subsidiary. Since then, the operating business in Australia has been re-established with a new structure. The Australian company is now managed by local partners, and Van Laacks acts only as licensor and supplier. Rhodes & Beckett has returned to the high street with new stores and an online platform. Herringbone is launching in the fall.
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