A major Australian retailer has gone into voluntary administration with expectations 193 people will lose their jobs and 54 stores will close.
On Tuesday afternoon, Godfreys Group appointed voluntary administrators.
Craig Crosbie, Robert Ditrich and Daniel Walley of the restructuring arm of PwC Australia are running the restructuring attempt.
They said that Godfreys Group Pty Ltd and its subsidiaries in Australia and New Zealand will continue to operate.
Godfreys Group is best known for selling vacuum cleaners and other cleaning products, and remembered for its unique television commercials.
One of the commercials showed their vacuums being so strong they could suck up a bowling ball.
John Hardy, the former CEO of Godfreys who has become a well-known face in Australian television due to starring in the advertisements, told news.com.au he is no longer involved in the business as he left three years ago.
There are 141 stores across Australia and New Zealand while there are a further 28 franchise stores.
There is a total of 600 staff employed by Godfreys.
Of that, 171 staff in Australia and 22 employees in New Zealand are “anticipated” to be left without jobs.
Godfreys has been an established business for nearly 100 years, beginning operations in 1931.
Godfrey Cohen launched the first eponymous Godfreys store in Melbourne’s Prahran Market.
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One of the administrators said that the company’s restructure had been brought about due to tough economic conditions.
“Like many retailers, Godfreys has faced a challenging economic and operating environment,” Mr Crosbie said.
“Lower customer demand amid cost of living pressures, higher operating costs, and increased competition have all taken a toll on profitability, with some stores more impacted than others.”
He said the business was trying to save as many stores and jobs as possible.
“We intend to trade the restructured store network and sell the business and assets as a going concern, with strong interest expected from prospective buyers,” he added.
The director of Godfreys, Mr Grant Hancock, said: “While the decision to appoint Administrators was difficult, it was made with the best interests of Godfreys’ employees, customers and broader stakeholders in mind.”
Godfreys was listed on Australia’s stock exchange years ago but was brought out privately in 2018 by the late John Johnston, a co-founder of the company who was aged 100 at the time he re-entered the workforce.
Jane Allen, the daughter of Mr Johnston, said in a statement “Sadly, like many retailers, we have been heavily impacted by consumer confidence and spending due to the economic era of high inflation, rising interest rates, and intense cost of living pressures.
“We are also still suffering from the unprecedented business disruptions of the Covid-19 pandemic.”
The first meeting of creditors will be held on February 9.
Godfreys is the latest to join a growing list of struggling retailers as discretionary spending closes down.
Last year, in March, iconic music and entertainment retailer Sanity shut down its last two remaining brick-and-mortar stores as it switched to a purely online model, coming down from a peak of 200 shops.
Another major player in the furniture retail space, Brosa, collapsed last year owing $24 million, including $10 million to customers from unfulfilled orders.
Fenton & Fenton, a Melbourne-based homewares boutique, entered into liquidation in August last year but was saved a month later by another furniture outfit.
The cost of living crisis has seen a drop in discretionary spending across Australia and all kinds of retailers — from furniture and fashion stores, to the wedding industry, have been hit hard.
Earlier this month, news.com.au reported that furniture store Papaya had closed down all its stores bar one and had moved into a predominantly online business model.
alex.turner-cohen@news.com.au