Iconic baby goods retailer Babyco has been placed into voluntary administration, putting the jobs of around 70 employees and the orders of thousands of expecting families in jeopardy.
The chain, which has 22 stores across Victoria, New South Wales, Queensland and South Australia, was put in the hands of Deloitte partners Tim Norman, Sal Algeri and Simon Cathro on Friday afternoon.
Just four stores are open for trading at present, although there is some chance other stores may re-open depending on how the administration progresses.
While the administrators are only just beginning their investigations into the chain’s financial affairs and say it is too early to say how much money is owed to creditors, Tim Norman blamed the collapse on “slowing sales and the competitive nature of the retail industry”.
The administrators will consider options for restructuring the business with a view to selling the chain as a going concern, although their main priority is to find out whether the business can cover standing orders made by expecting families.
“There are currently approximately 1,000 customers who have put deposits down on Babyco products around the country,” Norman said in a statement.
“Obviously we are very aware that this appointment puts expecting families in a difficult position. As it is early in the appointment, we cannot make comment as to whether our enquiries will be successful, however, we will let customers know of the outcome of our enquiries shortly.”
However, the administrators have warned customers that any stock currently sitting in Babyco stores may not actually be the property of the business and as such cannot be distributed until outstanding debts to creditors have been established.
Similarly, the administrators will also not be able to investigate refunding customer deposits until the financial position of the company has been established.
Babyco first started trading in November 1970 under the trading name of Golden J Nursery.
A first meeting of creditors will be held in Melbourne on 9 September.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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