Melbourne shopping centre in receivership as retail woes continue

Shopping centre owner and operator Austexx has again run into trouble, with its Spencer Street Fashion Station in Melbourne falling into receivership as retail industry conditions continue to worsen.

The receivership is another blow to Austexx, which nearly collapsed last year as it struggled to pay off debt associated with its DFO chains.

The company has outgoing ACCC chairman Graeme Samuel and rich list members David Goldberger and David Wieland as investors.

The Spencer Street centre used to be a DFO centre but was rebranded when Austexx opened the South Wharf DFO in Docklands two years ago.

That centre was nearly placed into receivership last year but refinanced with its banking syndicate despite facing nearly half a billion dollars of debt.

Korda Mentha administrator Craig Shepard says the Spencer Street centre will continue to operate as normal.

“We’re just trying to get the message out there that it’s business as usual,” he says.

“We’re making sure we have the appropriate insurances in place and that we’re writing to all the tenants to confirm nothing is changing.”

Shepard says there is “no hurry” and the receivers will attempt to find out what exactly needs to be done at the 120-tenant site before making recommendations.

“We were appointed yesterday and are just familiarising ourselves with our situation and making sure that services continue in their ordinary course,” he says.

“The priority for me is to stabilise everything and work through with our stakeholders, find out what the issues are and then work through them. We’re not turning up and just shutting the doors – there is no panic.”

Shepard would not reveal how much debt Austexx is facing but it is believed to be substantial.

The centre is the third of Austexx’s shopping centres to collapse in the past month, with two centres at Townsville and Torquay falling over.

Austexx sold four DFO outlets last year to CFS Retail Property Trust for half a billion dollars but is struggling to counter difficult retail conditions.

“You don’t have to be an expert to see people aren’t spending,” Shepard says.

The announcement comes a day after major retail shares including Myer, JB Hi-Fi and Harvey Norman plunged after David Jones announced it expects to see second-half profit drop 12% in what chief executive Paul Zahra says are some of the worst retail conditions in 20 years.