Vacuum cleaner retailer Godfreys has collapsed into administration and announced it will shut 54 stores and axe nearly 200 jobs in the next fortnight, leaving its 93-year history of trading hanging in the balance.
The business, founded in 1931 during the Great Depression, has appointed PwC Australia as voluntary administrators after struggling to recover from the COVID lockdowns and contending with a tougher economy and lower sales.
“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,” said Jane Allen, the daughter of Godfreys co-founder John Johnston, in a statement.
“We are also still suffering from the unprecedented business disruptions of the COVID-19 pandemic.
“While it’s deeply regrettable, we need to take this action. This decision has been made in the best interests of our employees, together with our customers – it’s about securing the company’s future.”
Godfreys operates 141 stores and has more than 600 staff across Australia and New Zealand, with a further 28 stores run by franchisees.
Administrators Craig Crosbie, Robert Ditrich and Daniel Walley will continue running the business, but are undertaking an “immediate operational restructure” that will shutter 54 stores and axe 193 staff positions over the next 14 days.
“Like many retailers, Godfreys has faced a challenging economic and operating environment. 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,” Crosbie said in a statement.
“Our aim is to move quickly to restructure Godfreys to preserve as much of the business and as many 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.”
The first meeting of creditors will be held on February 9.
Founder Godfrey Cohen and business partner Johnston sold the business in 2006 to private equity investors CCMP Capital Asia and Pacific Equity Partners for about $300 million.
The company listed on the ASX in 2014 but was plagued with falling sales, high turnover among senior management and a declining share price.
Source: Thanks smh.com