South African chain Retail Apparel Group (RAG) has been put into liquidation as the depressed credit sales environment and debt repayment pressures on consumers take their toll.

The store group's parent McCarthy Limited, which owns 96 per cent of RAG, said in a statement: "The combined effect of these developments and serious concern about RAG's future facilities and prospects in this over-traded segment of the market made liquidation unavoidable."

Brand Pretorius, McCarthy Limited CEO and non-executive chairman of RAG, added that measures to turn the company around - including major improvements in its business model, effective credit controls and a reduced expense structure - had failed.

Retail Apparel Group (RAG) sold clothing and footwear and was formed as a result of a merger between Smart and McCarthy Retail's Clobea. The company performed poorly in 2000 and 2001, with losses exceeding R500-million. A further substantial loss is forecast for the current year to 30 June following the loss of R29.7-million declared at the half-year mark.