Big South African footwear company goes into liquidation
The High Court in Johannesburg has ordered Drip Footwear to be liquidated as the company has failed to pay R20 million for advertising services.
The liquidation order has resulted in its employees being laid off this week and its 14 stores set to be shut in the coming months.
Founder Lekau Sehoana has been in the industry for 16 years and launched Drip after numerous startups failed to get off the ground.
Drip burst onto the scene in 2019 and grew rapidly, attracting partnerships with celebrities such as Cassper Nyovest.
This all culminated in a glitzy five-year anniversary party in July this year, where Sehoana hosted politicians and celebrities.
While celebrating five years of his own company, rumours of Drip’s looming liquidation began to circle as the company vacated its store in the V&A Waterfront in Cape Town.
At the beginning of September, the V&A terminated Drip’s lease as the company failed to pay its rent and filed papers in the Johannesburg High Court demanding it pay R1.1 million.
The company had already liquidated its clothing shop, called Kiddes Republic, in June last year as it was no longer financially viable.
Drip has also been mired in controversy, with Sehoana asking Gauteng economic development MEC Lebogang Maile for help to get back R3.6 million from the Reserve Bank.
Maile wrote a letter to Governor Lesetja Kganyago asking for leniency on behalf of Drip, which was at risk of losing millions for violating foreign exchange regulations.
The politician said he was helping Sehoana to prevent potential job losses and the sneaker business from collapsing.
In January, WideOpen Platform filed papers in the South Gauteng High Court seeking an order to wind up Drip Footwear, saying the company was insolvent and unable to service its debts of R20 million for advertising space.
Kim Warren, the attorney representing WideOpen, told the Citizen that Sehoana tried to oppose the company’s legal proceedings in March but did not win.
On Monday, Sehoana told his workers their employment had been terminated after months of late and missed payments.
Some of the company’s employees told the Citizen that they had not been told about the liquidation proceedings and were left in the dark.
“It was suddenly when last Wednesday we saw sheriffs from the police, and we were told the store is being closed and staff should pack and leave,” one manager said.
“Kindly note that the business has taken every measure to attempt and avoid the liquidation process. Unfortunately, this was an eventuality that could not be avoided notwithstanding the measures considered by the business,” Sehoana said in a letter to staff.
Sehoana also apologised to staff members for the situation.
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