Barbeques Galore to Close 62 Stores as Hundreds Face Redundancy
Synopsis
Barbeques Galore will shut its 62 company-owned stores after failing to secure a buyer or complete a recapitalisation deal, ending efforts to save the long-running Australian retailer. The company entered voluntary administration in February and employed about 500 staff at the time. Hundreds of workers now face redundancy, while the future of 27 franchise-operated stores remains uncertain. Customers can continue using gift cards until June 30 under specific conditions. Receivers will oversee the wind-up process, liquidate assets, and continue exploring sale opportunities as they seek to maximise returns for creditors.
Key Highlights
- Barbeques will close down its 62 corporate stores in the coming weeks.
- The retailer could not find a buyer or close a rescue recapitalisation deal.
- The business had around 500 employees when it went into administration in February.
- Meanwhile, the fate of 27 franchise-operated stores is also unclear.
- Gifting remains unchanged where customers can redeem gift cards up until June 30.
Less than a month after going to the courts in an attempt to save it, Australian retail chain Barbeques Galore has now abandoned its company-owned stores after failing to attract a buyer or come to terms on a rescue recapitalisation deal, with hundreds of workers likely facing redundancy.
In February, the retailer had gone into voluntary administration, and was speaking to administrators and receivers about how best to move ahead. Attempts to find a buyer or restructure the finances had not gone well, the firm said.
Deal to Rescue Fails After Months of Negotiating
In an attempt to keep the company running, administrators and receivers have been working on a recapitalisation plan with key creditor Gordon Brothers. The plan was predicated on renegotiations with landlords, suppliers and other stakeholders. The two parties were in negotiations, but they could not reach an agreement under which the proposal would be put forward.
Receivers said by late May it had become obvious there were no viable bids to buy or restructure the Barbeques Galore group and winding-up was its only other option.
Hundreds of Jobs Affected
When the Barbeques Galore went under administration earlier this year it operated 89 stores and employed around 500 staff. The firm said it would close its 62 company-owned stores during the wind-up process, while landlords of 27 franchise-run stores were still to decide on which will stay open.
Receivers indicated employees will be re-employed during the receivership or let go as stores progressively close. They further noted that all impacted employees will be provided with the full amount of their accrued redundancy and termination payments in the regular course of separation.
Gift Cards Until June 30
Gift cards for Barbeques Galore can still be redeemed by customers until June 30, with some conditions. With the arrangement, customers needed to spend $2 after redeeming on a gift voucher each. A person with a $50 gift card must, for instance, carry out a purchase of at least $150 to use the kept value (the remaining $100 are paid separately). Unutilized Gift card balances will be treated as unsecured creditor claims after June 30.
Receivers Continue Asset Sales Process
Started by Max Mason back in the 1970s, the chain grew into amongst Australia's most recognisable grill and outdoor lifestyle retailers. Operations remain in the hands of receivers during a wind-up period while they also search for prospective buyers for any remaining stores and assets, including clearing stock.
For a buyer, tough retail conditions made it more difficult to secure them, industry observers said. How much creditors will get back is contingent on how well assets are sold during the winding-up process.
Follow Inspirepreneur Magazine for daily global business news.
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
You Might Also Like
Trump-Putin Alaska Summit Ends Without Breakthrough on Ukraine
3 Essential Steps for Better Decision-Making