Godfreys has appointed veteran lawyer Nicholas Stretch as its chairman, one day after four board members resigned as 99-year-old co-founder John Johnston’s plan to take over the business progresses.
Stretch has been installed as an independent non-executive director and chairman of the retailer’s board effective immediately. He has been in legal practice for over 30 years and is head of law firm Denton’s Melbourne office and its corporate group in Australia.
In a statement to shareholders, Godfreys said Stretch has extensive experience in mergers and acquisitions. Stretch has previously acted for KordaMentha as receivers and managers of the Lincraft retail chain, that underwent a successful restructure.
The new Godfreys chairman has also acted as the sole director of Fusion Retail Brands during its financial restructuring and as legal adviser in relation to the sale of the Australian Geographic retail stores.
Johnston now controls more than 68 per cent of Godfreys through his vehicle Arcade Finance and is slated to take the business private to pursue a turnaround plan.
Earlier this week the bulk of Godfreys former leaders exited the business, with Arcade director Grant Hancock appointed to the board.
Stretch, who has also been appointed as an independent non-executive director, has more than 30 years of experience in mergers and acquisitions and is a Melbourne-based partner with law firm Dentons.
Arcade gained control of Godfreys last week following an announcement that major shareholders intended to support its 33.5 cent per share offer for the business after it has been sweetened from an original 32 cent per share offer.
The offer has been made unconditional and it is expected that the circa $10 million bid will be finalised in the coming months.
It will be the third time the business has undertaken a major ownership change in recent years, after being owned by private equity from 2006 – 2011 before being bought back by Johnston and a syndicate of other investors and listed on the ASX in 2014.
The business has spiralled since listing amid intensified competition from the likes of JB Hi-Fi and Harvey Norman, putting it in a position where it could default on its debt facility by the end of the year.
Godfreys board gave its support to the bid earlier this month after last ditch efforts to begin turning around the business under new chief executive Jason Gowie had the opposite effect, driving sales down 27 per cent in two weeks.
UPDATED: 25/05/2018 8:37 AEST
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