Furniture chain falls into administration
Unsustainably high rents have caused furniture chain Focus on Furniture to collapse into administration.
McGrathNicol, which took control of the business early last week, said the furniture chain’s decline was caused by high rents and unprofitable operations in New South Wales and Queensland.
“As an urgent priority, we will be conducting a review of options for the business, including a possible exit of unprofitable stores in New South Wales and Queensland,” said McGrathNicol partner Barry Kogan.
“It is clear that Focus on Furniture outlets in these states are struggling to compete effectively and on a profitable basis in the face of unsustainably high rents.”
The administrators have not yet announced which stores will be closed.
Directors of the furniture retailer have appointed McGrathNicol partners Kogan, Kathy Sozou and Matthew Caddy as voluntary administrators, McGrathNicol Restructuring announced on May 15, after the business sustained challenges to the Focus on Furniture business.
Focus on Furniture, which has 38 retail outlets and four distribution centres in Victoria, New South Wales, Queensland, South Australia and the Australian Capital Territory, operates under the Focus on Furniture and BedsOnline brands.
According to McGrathNicol, they will work with the company and its management team to restructure its physical store footprint, and recalibrate the network to the core, profitable locations in Victoria, regional New South Wales, South Australia and the Australian Capital Territory, while intending to maintain national coverage on its online store.
Kogan said during the administration period all deposits paid for furniture items will be honoured in full and orders placed will be delivered as planned. Gift cards will also remain redeemable at all Focus on Furniture stores.
“Long-term, the intention will be to refocus the business on the core platform of Victoria, South Australia and the Australian Capital Territory where operations are profitable,” Kogan said.
“Stores in these regions will continue to trade on a ‘business as usual’ basis during the restructuring process.”
A first statutory meeting of creditors is expected to take place on May 27.