A top Australian fashion designer has broken her silence after she moved to Paris and left behind debts of almost $2.6million owed to shattered creditors.
Kym Ellery, 39, quit Australia and closed down her local firm in 2019 amid a sea of debt, including huge unpaid bills to mum-and-dad small businesses.
The celebrated fashionista had soared to success after moving from Perth to Sydney and becoming an overnight sensation who found fame at Paris Fashion Week.
But it all came crashing down in April 2019 when her company Ellery Land collapsed owing $2,569,738.55 to creditors, including several family-run manufacturers.
She has now rebuilt her fashion empire in Paris, while the companies she left behind still struggle to recover from the brutal financial blow on the eve of Covid lockouts.
But Ms Ellery is unrepentant and insists: ‘All I can say is that ultimately I was doing my best.’
Top Australian fashion designer Kym Ellery has broken her silence after she moved to Paris (pictured) and left behind debts of almost $2.6million owed to shattered rag trade companies
The celebrated fashionista had soared to success after moving from Perth to Sydney and becoming an overnight sensation who found fame at Paris Fashion Week (pictured)
Overnight Kym Ellery became a darling of the fashion scene and sold through David Jones and Myer after a brief legal row over exclusivity (pictured outside court in 2013)
Since leaving the country she has flaunted her overseas success in a series of photoshoots and promotional interviews while living in a luxury apartment in Paris.
But she denies she’s fled Australia to dodge her debts to a long list of devastated fashion warehouses, jewellery manufacturers and modelling agencies.
From rags to riches: Kym Ellery’s rise and fall – and rise again…
Kym Ellery pictured in Paris in 2017
Kimberley Jean Kahurangi Ellery moved from Perth to Sydney aged 20, re-inventing herself as ‘Kym’, before taking a short fashion course in London.
She returned to Sydney as an intern with fashion mag RUSSH and in 2007, aged 23, set up Ellery Land, trading as Ellery, with her father Bruce who kickstarted the firm with a ‘small loan’.
By 2012, the fashion label was already making waves and an arty black and white video Ellery in Paris in 2014 preceded an invite for her label to show at the 2015 Paris Fashion Week.
She was one of only three Australian designers ever to be invited to be part of the biggest event on the fashion calendar.
Overnight she became a darling of the fashion scene, on the cover of magazines, headlining 2016’s Australian Fashion Week and sold through both David Jones and Myer after a brief legal row over exclusivity.
She moved to Paris in 2016 and was profiled by the New York Times in 2017 as her brand spread globally.
But in 2018, payments for her Australian suppliers began to dry up despite the headlines overseas.
On April 18, 2019, the local arm of the brand was wound up with debts of $2,569,738.55.
Liquidators spent another year winding up the company, with a final dividend announced for unsecured creditors just as Covid lockdowns began in May 2020.
Daily Mail Australia has contacted Bentleys Corporate Recovery for comment about the deal they secured for those left out of pocket by Ellery’s collapse.
Meanwhile, in Paris, Ellery went from strength to strength, with profiles revealing she ‘entertains three nights a week’ at her apartment near La Bastille, close to Notre Dame Cathedral.
At the same time manufacturers in Australia found out how much they would get back of the fortune owed by Ellery, she posed for a photoshoot on the roof of the Australian Embassy in Paris with her latest designs.
In 2021, Architectural Digest described her ‘dream Parisian apartment, full of natural sunlight, ornate crown moulding, and a rococo painted ceiling’.
And in 2022 she returned to Australia to launch a joint venture with local chain Witchery at lavish event hosted at a home in Sydney’s exclusive Darling Point in the city’s east.
The label’s website now proudly boasts it is ‘a luxury fashion brand born in Australia’ but ‘based in Paris’ and hails its ‘decadent approach’.
‘Just because you’re in another country doesn’t mean … you’re running away from something,’ she told ABC’s Background Briefing.
‘I’m not hiding from Ellery Land closing, and I don’t expect anyone to feel sorry for me either.
‘The question is, you know, was I supposed to drown back in 2019 or am I allowed to have another go?’
Her company’s operations in the weeks leading up to the collapse have since come under question.
Records show she transferred the ownership of the prized Ellery trademark to a new company owned by her just 13 days before the axe fell on her brand in Australia.
That company, The Holy Mountain – set up just one day before taking ownership of the Ellery trademark – also received $170,000 as a secured creditor while her suppliers were left to battle with liquidators as unsecured creditors.
Financial records also reveal the company was paying its producers $55 to supply a dress that would later sell for $790, and $40 for a skirt that sold for $550.
The average price mark up for Ellery on hundreds of its items was 14 times the manufacturing cost to the company, invoices reveal.
They show Ellery had taken delivery of more than $1million worth of stock in the months before it went bust – but it was still unable to pay its bills.
Her company organised payment plans with suppliers but those failed to keep pace with the value of new orders, leading to spiralling debts.
In Paris, Ms Ellery insists the Australian company was wrecked when a US supplier and a distributor crashed, costing the firm $500,000.
‘It’s easy for people to think that I breezed through it, but I absolutely did not,’ she said.
She said the company collapsed under a ‘cash-flow crunch’ caused by the delay between supplying goods and payment, which she claimed could take up to a year.
The financial problems were also exacerbated by ‘data entry errors’ and ‘accuracy problems’ by ‘the team’, she said.
And she strenuously denied phoenixing Ellery – where failing companies are re-birthed as new companies without any of the debt of the previous entity.
‘I was told the company was profitable up until the last moments,’ she said.
‘We absolutely did not perform any illegal phoenix activity.’
She says all transactions were done under ‘expert financial advice’ and the transfer of the trademark came when it was discovered it had previously been overlooked.
She said the transfer was supposed to have taken place long before but had somehow been missed until the error was spotted and remedied.
‘I thought it would be registered somewhere but of course it is not because it was a transaction between private companies,’ said Ms Ellery, who ran the business with her father Bruce.
The trademark is the essence of any brand and generally regarded as highly-valued intellectual property. No price was given for its sale to the associated company.
She rejected claims the trademark could have been sold off by liquidators to help bill the company’s debts.
‘I cannot agree with the hypothesis that my name should have been sold off,’ she told the ABC in an email.
‘I cannot see how that would have been better for anyone when you look at everything in context — it is my name.’
But as she admitted in a profile in 2015: ‘In fashion, it’s so easy to get screwed over.’
An arty black and white video Ellery in Paris in 2014 (pictured) preceded an invite to Paris Fashion week in 2015
Kym Ellery was one of only three Australian designers ever to be invited to be part of the biggest event on the fashion calendar (pictured, a model wearing Ellery in Paris in 2014)
The suppliers abandoned by Ellery
One mum-and-dad manufacturer in Sydney watched as the money owed by Ellery soared past $111,000 and they were powerless to do anything about it.
The brand became the biggest customer of Sadie Clothing Company based in Marrickville and run by husband and wife Raymond and Sally Wong.
They had already run into problems with payments and at one stage stopped taking orders, but renewed the arrangement as the label’s fame grew.
‘We saw all the magazine covers about how Ellery is showing in Paris,’ they told The Monthly. ‘The orders increased…the quantity increased.
‘[But] when someone becomes your major customer, they actually control your finances.
Kym Ellery’s label had 10 suppliers across Sydney and more overseas
‘We wanted to stop but because they owed money, we can’t stop manufacturing. We can’t say, “You not pay me, I not do!”
‘For manufacturing, if you want the factory running well, you need more work, more work.’
Even when they negotiated payment plans with Ellery, the cash coming in failed to cover the cost of new orders – and payments would often stop again within weeks of making the arrangement.
By the middle of 2018, they were owed more than $100,000, and that figure would continue to rise until Ellery Land finally crashed early in 2019.
Another company, May Garments in south-west Sydney, ran into similar problems, with payments for delivered orders facing increasing delays.
They were one of ten stock suppliers for Ellery across Sydney and owner Fu Mei Qiu says she was owed almost $80,000 when the label collapsed.
‘I lost so much money,’ she told The Monthly. ‘I was sad and crying for many days.’
The impact stretched beyond Australia too, with one Balinese jewellery manufacturer revealing he was owed $193,000 by Ellery.
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