Australian retailer Godfreys will close all remaining stores and lay off 25 head office staff immediately.
The vacuum cleaner chain will be phased out between now and May 31, after no suitable bids were received to buy the 93-year-old business from voluntary administration.
PwC Australia partner Craig Crosbie said on March 20 that despite receiving 55 expressions of interest and six tentative offers, none were enough to secure the business’s future.
“This is not the outcome Godfrey’s had hoped for following a rigorous process to find a purchaser for the business that could keep the store network trading,” he said.
“In the absence of any further bidders coming forward as intermittent trading continues, the process of closing all remaining stores will progress over the next eight weeks.”
He acknowledged it was a tough time for its 28 franchisees who received news on March 20 that they could no longer be supported. They have until March 31 to sell their current stock or return it for a refund.
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Meanwhile, the remaining 550 employees across 87 stores in Australia and New Zealand face gradual layoffs.
“We will continue to work closely with all parties to ensure they are informed and supported over the coming weeks,” Mr Crosbie said.
193 Jobs Lost, 54 Stores Closed
Godfrey’s cut 193 jobs and shut down 54 stores when it entered voluntary administration in January.A changing retail landscape and evolving consumer preferences significantly hit the iconic retailer’s bottom line.
“Like many retailers, Godfreys has faced a challenging economic and operating environment,” Mr. Crosbie said.
“Lower customer demand amid cost of living pressures, higher operating costs, and increased competition have all taken a toll on profitability.”
High living costs made people cautious about spending, according to Pattern Australia Manager Merline McGregor.
“Shoppers are more likely to take advantage of major sales events, following a 20 percent growth in consumer participation in Black Friday / Cyber Monday in 2023,” she said.
Major Players Overshadow A Century of Retail History
Known for its wide selection of vacuum cleaners and cleaning, Godfrey’s has been a familiar sight in Australian retail for almost 100 years.Godfrey Cohen founded the retail chain in Melbourne in 1931, selling door-to-door vacuum cleaners when they were unavailable for purchase in Australian stores.
The retailer was then listed on the ASX in 2014 but went private four years later due to tough competition from retailers like Harvey Norman, JB Hi-Fi, Amazon, and Kogan.com.
Competitor JB Hi-Fi’s 2024 results revealed a profit of $264.3 million in the six months leading to December 2024, with total sales rising by 0.7 percent to $3.62 billion.
The main growth areas were white goods, small appliances, and services.
However, CEO Terry Smart candidly acknowledged an increasingly competitive landscape, characterised by a surge in rival activity and on-floor discounting.
Online retailers Amazon Australia, Catch, eBay Australia, and Kogan are the four titans reigning over the marketplace.
Amazon leads with a 24 percent share in the home and kitchen sector, trailed by eBay at 16 percent, Catch at 10 percent, and Kogan at 9 percent.
