Angus & Robertson franchisees remain optimistic about their future, despite the announcement that some stores could be closed as early as next week.
The fate of Angus & Robertson franchisees was thrown into uncertainty, after the owner of the bookstore chain REDGroup Retail, was placed in the hands of administrator Ferrier Hodgson in February.
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REDGroup Retail owns 169 Angus & Robertson stores, 61 of which are franchises, in addition to 26 Borders bookstores, and employs about 2,500 staff.
At a creditors’ meeting held yesterday, Ferrier Hodgson administrator Steve Sherman said the company had been considering closing a number of stores prior to the group being placed in administration.
Sherman has revealed REDGroup Retail has $6.4 million in cash and stock on hand worth $119.9 million, but owes $7.8 million in employee entitlements.
He has also defended the company’s decision to require customers holding $15 million in gift vouchers to spend additional cash to redeem the value of the vouchers, saying the alternative is to cancel them outright.
According to the store manager of the Angus & Robertson Camden store in NSW, which also operates a pharmacy and a news agency, the store will continue to operate because it is franchised-owned rather than company-owned.
“Franchisors have the choice to carry on but, to my knowledge, they will not receive any support [from REDGroup Retail],” she says.
The owner of the NSW Dapto store says she has heard nothing about the possible closure of stores, and intends to continue operating as normal.
One Victorian franchisee says he has also had very little contact with REDGroup, other than information about the store’s controversial gift voucher redemption program, which has seen customers forced to spend the same amount of cash as their voucher is worth if they want to be able to redeem a gift card.
If REDGroup’s collapse is found to constitute a breach of the franchise agreement, or if the franchisees can extricate themselves from the agreements, they could look to continuing trading as independent bookstores, join a buying group or join another book franchise chain.
Meanwhile, a committee of franchisees has been established, led by franchisees from the Victoria Point store in Queensland, but they declined to comment.
The owner of the Goulbourn NSW store says the fate of Angus & Robertson franchisees rests in the hands of administraors, and he is anxiously awaiting any new announcements.
“It’s beyond our control… Hopefully we’ll stay open in one form or another but business has been a bit slow,” he says.
The future of 23 Gloria Jean’s franchisees is also in doubt as the coffee chain operates outlets within Borders stores, putting them at equal risk of closure.
The company said in a statement that until further information becomes available from Ferrier Hodgson, it cannot speculate on the future of Gloria Jean’s Coffee Houses located in Borders’ stores.
“However, we are in close contact with our franchise partners and team members and are keeping them as fully informed as possible,” the company said.