Longstanding Australian retailer Barbeques Galore will not be saved from administration, as a recapitalisation plan underpinned by retail investors Gordon Brothers has fallen through.
Gordon Brothers planned to restructure the business through a deed of company arrangement (DOCA), which involved a $5 million payment to creditors, the discharge of debt, and absorbing $6.6 million in employee entitlements. Announced in May, this arrangement was subject to creditor approval.
Despite being bought by Gordon Brothers in December from private equity firm Quadrant, the announcement of its voluntary administration just two months later was called “necessary“ by the retailer’s newly-appointed CEO, David White.
But a brand-new development, first reported by the Australian Financial Review and confirmed by sources familiar with the deal to Inside Retail, said that the DOCA will not be completed.
This is because the sale of the Barbeques Galore Group has not been met with any offers “capable of acceptance or implementation”. Now, the group’s 89 retail stores, 62 of which are company-owned and 27 are owned and operated by franchisees, will begin a wind-up process.
Receivers Quentin Olde, Luke Pittorino, and Liam Healey of Ankura will work through “suitable transitional arrangements” with the 27 franchise stores. The company-owned sites, however, will begin to either be sold or liquidated.
The decision follows a May 22 meeting of creditors, in which the proposed DOCA received overwhelming support, due to its potential to save around 500 jobs within the group. But since that meeting, the involved parties could not find a way to implement the proposals; they agreed to begin the winding-up process on June 16.
The group’s remaining employees will either keep their jobs during the receivership or be made redundant from the commencement of the winding-up. All employees will be paid their full accrued redundancy payments.
Customers, meanwhile, will have until June 30 to use any gift cards valid at Barbeques Galore.
This article was first published on Inside Retail.
