The administrators of collapsed furniture retain chain Sleep City have announced the company’s 64 stores will be shut over the next six to eight weeks, just days after the company collapsed into administration.
The closures will add to the growing number of retail locations that are set to close within the next two years, with major companies including Speciality Fashion, Luxottica and Billabong all announcing plans of their own to close down hundreds of shops.
PWC partner Michael Fung announced yesterday that Sleep City and Everyday Living stores, the brands owned by parent company Furniture and Bedding Concepts, would close. The financial position of the businesses simply didn’t allow for them to continue trading, he said.
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“We have entered into an in principle agreement with Hilco Merchant Australia to conduct an orderly liquidation of remaining stock, both in the stores and the distribution centres,” Fung said in a statement.
“This arrangement will enable us to maximise the return from the companies’ existing stock for the benefit of creditors including employees.”
The company has 450 staff across the country, although Fung says as many as possible will continue to be employed while the wind-down is completed. After that point, all staff will be made redundant.
“We have chosen this orderly wind down option, rather than immediate shutdown, in order to provide staff with some additional employment, albeit for only some weeks.”
The closures come as industry continues to suffer from poor trading conditions. Nearly 500 stores closures have been announced by major companies including Billabong and Speciality Fashion, with analysts expecting more to come over the course of the year.