Over 100 employees lost their positions after a number of Sydney Nike stores closed when the firm operating them collapsed into liquidation. AF-1 and associated companies, which had operated Nike stores in Sydney’s east and west, were put into liquidation on September 26, and John Morgan of BCR Advisory was appointed as liquidator. Trading was suspended in Nike stores at Bondi Junction, Burwood, Castle Hill, Neutral Bay, Sydney CBD, and Warringah on Friday.
113 casual and full-time staff had termination notices handed to them when the stores shut down. According to a statement issued by BCR Advisory, the companies are no longer trading as Nike stores and are no longer trading immediately. Eligible staff will receive their entitlements, such as unpaid annual leave, wages and redundancy payments under the Commonwealth Government FEG scheme.
Customers With Gift Cards and Credits are Also Affected
The shutdown also damages customers who possess credits or gift cards from such stores. The liquidator explained sadly, gift certificates and store credits cannot be honoured since these are unsecured claims against the companies that ran the stores. This implies individuals who purchased gift cards or had store credit from these specific Nike stores will not have the ability to utilise them or receive their money back.
The liquidator’s office is cooperating with Nike and the landlords to organise the store closures in an orderly manner. Other Nike stores all over Sydney that bear no relationship to AF-1 still operate as usual; therefore, not all Nike shops in Sydney are impacted by this shutdown.
What Happens to Workers and Customers Now
The 113 employees who lost their jobs will have to make claims to the government’s Fair Entitlements Guarantee scheme to receive payment for what they are owed. This includes any leave they did not take, wages they have not yet been paid, and redundancy pay they are entitled to for losing their jobs. The government scheme supports workers when their employer collapses and cannot pay them.
For customers who have gift cards or store credits, there is no way to get the money back, unfortunately, because these are unsecured debts. In case a company is liquidated, secured creditors such as banks are paid first, followed by employees who receive some amount of money through the government scheme, and unsecured creditors such as gift card holders typically receive little or nothing. The liquidator will dispose of any leftover stock and assets in a bid to repay some of the debt.
News At Glance
- Six Sydney Nike stores shut down after franchisee AF-1 entered liquidation on September 26
- 113 casual and full-time employees received letters of termination and lost employment
- Employees will receive entitlements via the government FEG scheme, such as unpaid leave and redundancy
- Gift card and store credit customers are unable to use them or obtain refunds
FAQs
1. How many Nike stores closed down in Sydney?
Six stores shut down in Bondi Junction, Burwood, Castle Hill, Neutral Bay, Sydney CBD, and Warringah.
2. How many employees lost their jobs?
113 part-time and full-time staff received letters of termination.
3. Will employees be paid what they’re entitled to?
Yes, the eligible employees will receive entitlements under the Commonwealth Government FEG scheme.
4. Can customers use gift cards from the stores?
No, gift certificates and store credits cannot be honoured and are unsecured claims.
5. Are all Nike stores in Sydney closed?
No, other Nike stores with no relation to AF-1 remain operating normally.
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