Flannerys failure: Owner of Gold Coast-founded chain blames supermarket competition for going into administration

The owner of the Flannerys health food stores has pinpointed where it all went wrong for the Gold Coast-founded chain.

THE owners of Gold Coast-founded healthfoods chain Flannerys – which called in administrators yesterday – have blamed competition from the big supermarkets for the business’ failure.

Yesterday a notice was filed with the Australian Securities and Investments Commission announcing Timothy Cook, of Balance Insolvency, had been appointed administrator to The Natural Grocery Company Pty Ltd.

The company was registered in 2015 as a retailer and franchisor of natural organic groceries and had revenue of $66 million in FY18 and more than 500 employees. Its brands apart from Flannerys included Kunara, Mrs. Watsons and Fundies.

The Natural Grocery Company Pty Ltd issued a statement today following the “difficult decision” to put the company into voluntary administration.

Flannerys Organic Wholefood and Market Toowoomba has closed.

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It said pressure on margins and the increasing distribution of health food products in major supermarkets had combined to “severely impact business performance”.

Coles and Woolworths carry a much larger range of vegan, gluten-free and organic products compared to five years ago.

“The company instituted a comprehensive turnaround plan in early 2019, but despite the significant efforts of management, in-store teams and the board, the plan failed to yield the required results,” the statement reads.

“The Company and its directors are working closely with advisers on a Deed of Company Arrangement (DOCA) proposal to present to the administrator to transition the business into a smaller and sustainable store network.”

So far the Flannerys Toowoomba store has shut and it is understood the administrator will look to further closures to rescue the business.

Flannerys opened a new store in Mona Vale, Sydney last year. Pictured are managers Nathan Shoesmith and Dee Clark. Picture: Adam Yip / Manly Daily

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The Bulletin contacted several Flannerys stores today and was told employees had been instructed not to talk to media.

Ex-Metcash supermarkets CEO Fergus Collins has been appointed as acting CEO for the period of administration.

“Fergus is an experienced retailer having previously held the positions of CEO for Metcash Grocery business and CEO of Metcash Liquor business, Australian Liquor Marketers,” The Natural Grocery Company said.

“Under the DOCA a large number of the employees will continue with the business and all employee entitlements will be paid in full and the company’s creditors are anticipated to receive a significant dividend.”

The Flannerys family sold out of the business 11 years ago. Pictured are from left to right: Martin Meek with wife Genevieve and Berice Flannery with husband Mal at the Benowa store.

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The directors of Sydney-based The Natural Grocery Company Pty Ltd are Sydney residents Paul Wilson and Stephen Parsonage and Brisbane resident Michael Hume.

Flannerys has a network of stores along the East Coast with locations in Robina, Miami, Benowa and Paradise Point on the Gold Coast as well as other Queensland stores in Toowoomba, Victoria Point, Maroochydore, Wynnum, Taringa, Loganholme and Chermside.

It has four stores in Sydney.

Mal and Berice Flannery established Mrs Flannery’s – now known as Flannerys Organic & Whole Market – in 1973 and grew it into a multimillion-dollar franchise business before selling out 11 years ago.