Godfreys, Australia’s Oldest Vacuum Cleaner Retailer, Enters Administration Amid Economic Challenges

Vacuum cleaner retailer Godfreys, Australia’s oldest and one of the world’s largest vacuum cleaner retailers, has collapsed into administration, raising concerns about the future of the 93-year-old business. The ongoing challenges from the COVID-19 pandemic, economic pressures, and lower sales have forced Godfreys to make the difficult decision to shut down 54 stores and lay off nearly 200 employees over the next two weeks.

PwC Australia has been appointed as voluntary administrators to oversee the process. Jane Allen, the daughter of Godfreys co-founder John Johnston, expressed her sadness at the situation, acknowledging the impact of inflation, rising interest rates, and cost-of-living pressures on consumer confidence and spending. She also highlighted the business disruptions caused by the COVID-19 pandemic.

The administrators, Craig Crosbie, Robert Ditrich, and Daniel Walley, will begin an immediate restructuring of the business. This restructuring will result in the closure of 54 stores and the loss of 193 jobs. The aim is to preserve as much of the business and as many jobs as possible. The administrators plan to continue trading the restructured store network and sell the business and assets as a going concern, with strong interest expected from potential buyers.

Godfreys, which operates 141 stores and employs over 600 staff across Australia and New Zealand, has faced a challenging economic and operating environment. Lower customer demand, higher operating costs, and increased competition have all contributed to a decline in profitability, with some stores more affected than others. This decline in performance led to the decision to appoint administrators.

Godfreys has a long history in the industry, and its founders, Godfrey Cohen and John Johnston, sold the business in 2006. It later listed on the ASX in 2014 but experienced falling sales, management turnover, and a declining share price. Johnston bought back the business in 2018 in an attempt to turn its fortunes around.

The first meeting of creditors will take place on February 9 to discuss the next steps for the company. Despite the challenges it currently faces, there is hope of finding a buyer who can contribute to Godfreys’ future success.