Furniture retailer Sleep City in administration as pressure mounts on manufacturing and retail
Monday, February 13, 2012/
The manufacturing and retail industries have continued to come under pressure with yet another business entering administration, with furniture seller Sleep City now put under the hands of PwC.
The move comes just days after another office furniture manufacturing business, Desking Systems, was placed in the hands of administrators, due in part to a failure to meet a $5 million debt obligation alongside a larger slowdown in the industry.
Sleep City, which has 64 stores across the country and around 450 workers, has now entered voluntary administration. PwC partners Michael Fung, Greg Hall and Guy Edwards have been appointed over the company and four related entities.
These other entities include Furniture and Bedding Concepts, Everyday Sleep Trading, Uinta Beds, SDM Marketing and Global Victory.
In a statement, Fung said the company will be operating under a “business as usual” mode for now, “while we get a clearer understanding of the current state of each business”.
“We are still investigating the causes behind the administration; however we believe that the current soft retail environment is a contributing factor.”
The company had previously operated a mattress factory, but that was shut down in 2010. According to various reports, the company had then sourced its mattresses from other manufacturers.
The Construction, Forestry, Mining and Energy Union is also now looking at the implications the collapse will have for these local manufacturing businesses.
Both the manufacturing and retail industries are two of the biggest contributors to the recent rise in insolvencies – yesterday new data was revealed showing 2011 was the biggest year on record for corporate collapses.
The rise of these insolvencies also comes as major players in the manufacturing industry have warned a continued slowdown will risk tens of thousands of jobs. Last week, Manufacturing Australia head Dick Warburton said the country could lose as many as 400,000 jobs if nothing is done to stop the slowdown.