Godfreys was losing $20m a quarter before collapse

The Godfreys chain is understood to have been losing $20m a quarter.

Further details are filtering out from the fallout of two casualties of the tougher economic conditions – Godfreys Group and Sara Lee.

Godfreys was said to be losing about $20m a quarter before it entered administration, but the group does not owe money to third party lenders, say sources.

PwC was announced this week as the insolvency firm handling the administration of the iconic vacuum cleaner retailer.

While the company had debt, it was all money owed to members of the Johnston family which owned the business.

The late co-founder John Johnson, who died in 2018, privatised the business after it was listed on the Australian Securities Exchange.

Godfreys CEO John Hardy with 100yr old John Johnston. Picture: Tricia Watkinson

When it delisted, its market value had fallen to below $10m from more than $100m.

Established in 1931, Godfreys is one of the world’s largest vacuum retailers and operates 141 stores and employs more than 600 staff across Australia and New Zealand, with an additional 28 stores run by franchisees.

Craig Crosbie, Robert Ditrich and Daniel Walley of PwC Australia have been appointed as voluntary administrators of the Australian entities.

John Fisk and Stephen White of PwC New Zealand have been appointed voluntary administrators over the New Zealand subsidiary.

The administrators will continue to trade the Godfreys business while undertaking an immediate operational restructure and sale process.

As a result of the restructure, it is anticipated that 54 stores will be closed, affecting the employment of about 193 staff, 171 in Australia and 22 in New Zealand.

Hurting the business was high cost of living pressures and rising inflation.

Meanwhile, it is understood that the sale of the Australian and New Zealand arm of dessert maker Sara Lee, which had entered administration last year, was for a nominal sum.

The talk around the market is that the Quinn family who bought the business took it off the hands of the receivers, in a move that may leave its lenders licking their wounds.

Expectations are a similar outcome could be awaiting Godfreys.

NZ private equity firm South Island Office purchased Sara Lee from the McCain frozen food company in 2021 for a price valuing the business at $76m and including a $36.4m cash payment, according to accounts.