Too many stores, a botched heritage building project and an unhappy backer: The signs Australian fashion brand Dion Lee was heading for collapse

Fashion lovers were shocked when the Australian franchise of major fashion label Dion Lee went into administration on Thursday.

It’s understood the beloved brand, worn by megastars like Taylor Swift and Dua Lipa, went bankrupt after a partnership deal with Cue Clothing Co fell through.

And industry insiders have now revealed the signs that Dion Lee was heading for disaster.

Speak with News Corp On Sunday, a source claimed that Lee had “forgotten his roots” in recent years by opening too many stores.

“Unless you’re a Zimmerman, opening too many stores is a recipe for disaster. His supporters probably got tired of him not focusing on profits,” they claimed.

Another insider pointed out Lee’s failed plans to open a store in a sprawling loft space with 18-foot ceilings and original columns in New York’s SoHo neighborhood.

He planned to open the store after showcasing his Fall/Winter 2001-2002 collection at the same location, but his plans never came to fruition.

‘It never opened. It is a heritage building, a 4000 square meter space and much of the building was out of code. He couldn’t open the store until they put a lot of money into it,” the source said, noting that the project put enormous financial pressure on Lee.

Speaking to News Corp on Sunday, a source claimed Lee had “forgotten his roots” in recent years by opening too many stores. (Image: A model walking at Dion Lee’s Spring 2004 show during New York Fashion Week)

The insider also speculated that Lee’s differences with his powerful backer Cue Clothing Co may have contributed to the brand’s demise.

Cue became a partner of Dion Lee in 2013 and was also a shareholder in the company.

Anyway has reportedly terminated its partnership agreement with Dion Lee and also canceled their investment in the company The Australian.

Another insider pointed out Lee’s failed plans to open a store in a sprawling loft space with five-foot ceilings and original columns in New York’s SoHo neighborhood (pictured)

The withdrawal of Cue’s investment is believed to have exacerbated the demise of the Dion Lee brand.

Announcing the break-up of the relationship, a Cue spokesperson said: ‘Following a recent strategic review, the Cue Group has decided to focus on our local Cue and Veronika Maine businesses.’

Antony Resnick, a trustee of insolvency company dVT Group, has been appointed as administrator for Australian Dion Lee.

The insider also speculated that Lee’s differences with his powerful backer Cue Clothing Co may have contributed to the brand’s demise. (Image: Models wearing clothes designed by Dion Lee at Australian Fashion Week 2024)

dVT Group is also considering investors for the company to strengthen their current financial position.

It is believed that the company will continue its operations until the company is restructured

Dion Lee found newfound fame after pop star Taylor Swift wore a $650 Dion Lee Crochet Corset Top to the Super Bowl while cheering on her boyfriend Travis Kelce.

Pictured right shows pop star Taylor Swift wearing a Dion Lee crochet corset top at the SuperBowl in February

The clothing label was founded in 2009 by Australian fashion designer Dion Lee.

Since then, the company has grown exponentially, with six outlets in Australia and 160 stores worldwide, including a US store that opened in December last year.

Mr Lee, 38, has also collaborated with Kanye West on a shoe collection and designed clothes worn by pop star Dua Lipa.

Some of the Dion Lee-designed accessories cost as much as $A990.

Mr Resnick said it was too early to assess the company’s assets and liabilities.

The Dion Lee brand has built global recognition and credibility in the fashion world,” Resnick said in a statement. news.com.au.

Administrators have been appointed to oversee the company’s financial operations (Photo: Australian superstars Kylie and Dannii Minogue carry Dion Lee during their performance at the 2024 Sydney World Pride Opening Concert)

‘It is regularly worn by cultural icons and influencers. It is known in the industry for its unique designs. All this should attract the interest of both local and international investors.’13445139

A Mr Resnick also said that an accounts payable report is being prepared, which will detail the amount owed to a company’s suppliers, and that another meeting with suppliers should be held to discuss outstanding payments.

Only Australian store operations are believed to be affected and customers can still access the company’s online website.

The Dion Lee store’s financial position is also reportedly under review.