Australian vacuum cleaner retailer Godfreys has called in the administrators, who plan to close 54 stores and cease the employment of 193 employees across the legacy brand.
The 93-year-old business has tapped Craig Crosbie, Robert Ditrich and Daniel Walley of PricewaterhouseCoopers (PwC) Australia to handle its domestic business, with PwC’s New Zealand branch set to administrate Godfreys’ Kiwi subsidiary.
The administrators intend to continue trading the business while conducting an immediate restructure and sales process.
That process will see Godfreys close 54 of its 141 stores in the next fortnight, affecting the employment of 171 Australian and 22 New Zealand staff.
Despite the perennial need for household and commercial cleaning solutions, Godfreys has not escaped a “challenging” economic environment for retailers, Crosbie said in a statement.
“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.
Godfreys’ administration caps off a difficult decade for the business.
Godfreys was founded in 1931 by John Johnston and Godfrey Cohen in the Melbourne commercial hotspot of Prahran and grew to become synonymous with vacuum cleaners for generations of shoppers.
After a private equity buyout in 2006, the brand launched on the Australian Securities Exchange in 2014, boasting a market capitalisation of $111 million, 209 stores, and a franchise network of 85 satellite shops.
Its fortunes flagged over the coming years, leading to a takeover by Johnston, then 99 years old, in 2018.
Through Arcade Finance, Johnston took Godfreys private through a takeover bid that valued the business at $13 million.
The administrators now intend to preserve as much of the brand’s business as possible through the restructuring and attempted sale process, Crosbie said.
“We will continue to work closely with Godfreys’ director, management, and creditors, including staff whose employment is unfortunately impacted by store closures,” he said.
Grant Hancock, Godfreys director, said the “difficult” decision to enter administration was “made with the best interests of Godfreys’ employees, customers and broader stakeholders in mind”.
The first meeting of creditors will take place on Friday, February 9.
By entering administration, Godfreys has become the major name in Australian retail to falter under changing consumer spending habits.
Although Godfreys operates its own e-commerce store, offering vacuums, steam cleaners, and commercial cleaning accessories, the business has watched players like Kogan, and more recently, Amazon, acquire Australian e-commerce consumers.
Those players have entered a market that Godfreys has valued at $1.3 billion per annum.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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