Radio Rentals closing all stores in South Australia
South Australian retailer Radio Rentals will close its 12 bricks-and-mortar stores and e-commerce site over the next two months due to difficult trading conditions.
The 61-year-old business, which is not connected to the Radio Rentals chain owned and operated by the Thorn Group, blamed the closure on difficult trading conditions in the sector, and the rise of disruptive players in the consumer electronics retail and rental space.
“This has resulted in significant performance decline despite the best efforts of everyone to reinvigorate the business,” Nick Palmer, Radio Rentals’ managing director, said in a statement.
The closure reportedly will impact 100 employees. Radio Rentals said employees will receive their full entitlements, and that it will support and counsel those impacted, and help them to find new jobs.
“Our success, as a South Australian family owned business was built around generations of wonderful employees, valued customers and business partners and a mission to make electrical and home appliances affordable and accessible to more and more homes and families,” Palmer said in a statement on the website.
Radio Rentals said the decision to close its retail operations was a difficult and emotional one, and only taken after careful consideration and pursuit of all other strategic options including a sale.
The retailer’s rental business, which is managed by inRent, will not be impacted the closure. Rental customers’ contracts with inRent remain valid, and they will continue to receive ongoing product servicing and upgrades.
Radio Rentals will keep its head office open to service rentals for the sale of ex-rental inventory. The stores and e-commerce site are expected to close around mid-June, with all retail stock to be cleared over this period.
Tim Luce, CEO of the Thorn Group, told theAustralian Financial Review that the closure of the South Australian chain did not have any direct implications for the 64 Radio Rentals and Rentlo Reinvented stores that are owned and operated by the Thorn Group.
The Thorn Group on April 1, 2019, announced it was conducting a strategic review of the business to protect and maximise shareholder value, including the consideration of alternative ownership. It expects to provide an update to shareholders of the conclusions of its review within the next few months.
The company this month also downgraded its profit guidance for the financial year ended March 31, 2019. Previous profit guidance provided in January of this year, indicating a loss in the order of $6 million, has been revised downward to $8 million, following increased arrears and write-offs in the consumer leasing business. The company does not expect to pay a final dividend to retain cash for balance sheet flexibility.
Thorn Group was fined $2 million last year after admitting to breaking national consumer laws.