Administrators have closed seven stores of collapsed retail brands Rhodes & Beckett and Herringbone as a sale campaign begins for the businesses.
Three Herringbone stores and four Rhodes & Beckett stores have closed, with administrator Bruno Secatore from Cor Cordis saying on Monday “as we seek to find a buyer for the businesses, it’s important to limit ongoing losses”.
The brands collapsed into voluntary administration on February 6, with challenging retail conditions and high overheads cited as contributing factors.
Expressions of interest are now being sought for the businesses as a going concern. The brands now operate 22 stores and employ 136 employees, after some staff at the closed stores were redeployed to other locations, reports Sky News.
In a note to potential buyers, administrators said the stores are available as “a single sale or separately”. According to Cor Cordis, the brands continue to boast high profile lease locations, strong customer databases and online stores, and a turnover of around $40 million annually.
Retail experts told SmartCompany last week that cashflow has been a significant factor in the troubles faced by Australian retailers so far in 2017, with February a tough month for struggling stores as invoices for Christmas inventory need to be paid.
However, cash flow and inventory problems tend to build up over a number of years, said Michael Stapleton, a founding member of the Association of Virtual CFOs.
“That’s probably something that for most of these guys has carried on for more than one year—it’s finally caught up for them. I would say there’s multiple years of bad trading, overhang of inventory,” he said.
Meanwhile, chief executive of the Australian Retailers Association Russell Zimmerman says high rents continue to be a challenge for local retailers, with steep increases not helping the local retail environment as international brands continued to stake their claim in Australia.
Cor Cordis is seeking indicative offers for Herringbone and Rhodes & Beckett by February 17.