A leading retailer of vacuum cleaners in Australia and New Zealand has collapsed due to the impact of the COVID-19 pandemic and challenging economic conditions.
On Jan. 30, Godfreys Group, which operates a chain of 141 retail vacuum cleaner stores (with an additional 28 stores managed by franchise), announced that it had entered into voluntary administration, with PricewaterhouseCoopers (PwC) appointed as the administrator.
The business was founded in 1931 in a small family’s furniture store by Godfrey Cohen and later evolved into a large corporation with 600 staff.
However, challenging economic conditions in the past few years have brought the well-known business to its knees.
“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,” Jane Allen, the daughter of Godfrey’s late co-founder John Johnston, said in a statement.
“We are also still suffering from the unprecedented business disruptions of the COVID-19 pandemic.”
Meanwhile, Godfreys’ director, Grant Hancock, said putting the business into administration was a tough but necessary decision.
“While the decision to appoint administrators was difficult, it was made with the best interests of Godfreys’ employees, customers, and broader stakeholders in mind,” he said.
According to PwC, Godfreys will not totally shut down but undergo an “immediate” restructuring that could lead to 54 stores being closed and 193 staff losing their jobs in the next two weeks.
The business will continue to trade as usual during the restructuring process.
Administrator Craig Crosbie said his team aimed to “preserve as much of the business and as many jobs as possible” while looking for a buyer for the retailer.
“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 said.
“We will continue to work closely with Godfreys’ director, management, and creditors, including staff whose employment is unfortunately impacted by store closures.”
The first meeting between the administrators and Godfreys’ creditors will occur on Feb. 9.
In the 2021-2022 financial year, the business reported a total sales revenue of $176 million (US$116 million) and a net profit of $1.48 million.
