Yahoo Finance More than 600 jobs lost as Godfreys is set to close forever
After being in business for nearly 100 years, the iconic vacuum retailer has failed to find a buyer after falling into voluntary administration.
Iconic business Godfreys is set to close after no buyer was found to save the struggling vacuum retailer.
The suction empire has been running for nearly 100 years in Australia but it was revealed in late January that it had entered into voluntary administration. Godfreys Group cited cost-of-living pressures and inflation as the reasons behind its collapse.
There was hope someone would swoop in to save the brand from total collapse, however that financial knight in shining armour hasn’t materialised in time.
Have you been affected by Godfreys' collapse? Email stew.perrie@yahooinc.com
There are 141 stores across Australia and New Zealand that will be forced to close and the move will see more than 600 people lose their jobs.
Those who were facing unemployment were given a lifeline from Jim’s Cleaning CEO Haydar Hussein, who told Yahoo Finance he would pay for each person to start their own Jim’s Cleaning franchise, which is worth up to $25,000 each.
“Our Jim’s Cleaning franchises have been shopping at Godfreys for over 10 years now,” he said.
“We got our chemicals and vacuums from them, so it's kind of a personal relationship with the staff in the stores. And then I've got a relationship with the management because they visit me all the time.
“But above all that, about six years ago, we developed our own cleaning product, and Godfreys was the first store to put that on their shelves, and they made over $100,000 orders straight up.
“I kind of owe it to them. They were good to me so it's my time to pay back.”
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PwC Australia’s Craig Crosbie, Robert Ditrich and Daniel Walley were appointed administrators of Godfreys and they have spent weeks trying to bring the retailer back from the dead.
“After conducting a comprehensive process to identify a purchaser for the business, no viable offers to take the business forward as a going concern have been submitted,” the liquidators said.
“With interested parties withdrawing and no satisfactory bids to acquire Godfreys store network yet received, the administrators have no other option but to commence a progressive wind-down of Godfreys’ operations in Australia and New Zealand.”
They received 55 expressions of interest from potential buyers and six offers, however they were either withdrawn or not sufficient.
Godfreys franchises have been told they can no longer be supported.
“Franchised stores can trade until March 31 to realise the value of existing stock or alternatively return stock sold to them during the administration period to receive a credit on amounts owed to Godfreys,” the administrators said.
“This is not the outcome Godfreys had hoped for following a rigorous process to find a purchaser for the business that could keep the store network trading,” the administrators added.
“Godfreys stores will continue to trade on an interim basis to provide a reasonable period for the clearance of existing stock, after which stores will be notified that closures will take effect.”
While stores are free to trade until the end of March, they will officially have to shut their doors forever on May 31.
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