Pets Paradise franchisees won’t be affected by the collapse of the pet store chain, it’s been confirmed, but the receivers say company-operated stores have been struggling for 18 months.
Pets Paradise was founded about 20 years ago by Melbourne-based entrepreneur Gary Diamond, who grew the concept from a single store to a national chain of 62 stores.
But the Bank of Melbourne, which is owed $11 million, has appointed Deloitte as receivers of the struggling chain, which is part of Diamond’s Paradise Retail Holdings group.
In addition to Pets Paradise, Paradise Retail Holdings operates national cafe chain Billy Baxter’s, Global Pet Products and Warner Bros’ Australian retail operations.
Billy Baxter’s was placed into provisional liquidation earlier this month after it failed to pay a $1.2 million damages claim.
The Paradise Retail Holdings group has 170 staff across its operations, and runs 62 stores under the Pets Paradise, Pet Goods Direct and Pets R Fun brands.
There are 19 stores each in Victoria and NSW, 14 in Queensland, four in South Australia, three in WA, two in Canberra and one in Tasmania.
Get SmartCompany FREE to your inbox every weekday
Both company-owned and franchised stores will continue to trade as normal while “an urgent assessment of the group’s financial position is undertaken”.
It’s understood franchisees will not be affected as they form the value of the asset that receivers expect to sell.
Pets Paradise has declined to comment, but receivers said company-operated Pets Paradise stores have been struggling for 18 months amid “significant rental exposures from store closures”.
A creditors’ meeting will occur shortly, along with a sale of the businesses.