Australia’s most famous vacuum retailer Godfreys collapses into administration

After almost 100 years, iconic retailer Godfreys has fallen into administration with 190 immediate job losses and 50 store closures as the family owners blame cost of living pressures.

After almost 100 years in business vacuum specialist Godfreys has collapsed into administration. Photo Patrick Woods

Godfreys Group, the iconic retailer of vacuums that has been selling cleaners for almost 100 years, has collapsed into administration, with cost of living pressures and the challenging economic environment sucking out its profitability and causing its demise.

The business had been owned by the Johnston family with former patriarch John Johnston a co-founder of the business and still active within the company at 100 years of age.
He died in 2018, just five months after he led a takeover of the business which included it being briefly listed on the stock exchange.

“Sadly, like many retailers, we have been heavily impacted by consumer confidence and spending due to the economic era of high inflation, rising interest rates, and intense cost of living pressures,” Mr Johnston’s daughter Jane Allen said on Tuesday.

“We are also still suffering from the unprecedented business disruptions of the Covid-19 pandemic,” she added.

The collapse of Godfreys has placed in doubt the future of its 141 stores across Australia and New Zealand and its 600 staff, with the voluntary administrators appointed to the failed retailer deciding that around 54 stores will close within the next two weeks with the loss of 193 staff of which 171 are in Australia.

John Johnston and others outside Godfreys original Adelaide Arcade store. Picture: Supplied

Established in 1931, Godfreys is one of the world’s largest vacuum retailers and one of Australia and New Zealand’s leading suppliers of specialty commercial floor care and associated cleaning products.
The first store was opened in Melbourne in 1936, followed three years later with the first Adelaide store in Adelaide Arcade in 1939.

The business 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 PricewaterhouseCoopers 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 within the next 14 days, affecting the employment of approximately 193 staff, 171 in Australia and 22 in New Zealand.

“Like many retailers, Godfreys has faced a challenging economic and operating environment,” Mr Crosbie said. “Lower customer demand amid cost of living pressures, higher operating costs, and increased competition have all taken a toll on profitability, with some stores more impacted than others.

John Johnston. Picture: Supplied

“Our aim is to move quickly to restructure Godfreys to preserve as much of the business and as many jobs as possible. We intend to trade the restructured store network and sell the business and assets as a going concern, with strong interest expected from prospective buyers.”

Godfreys’ director, Mr Grant Hancock, said: “While the decision to appoint administrators was difficult, it was made with the best interests of Godfreys’ employees, customers and broader stakeholders in mind.”

The first meeting of creditors will be held on February 9.

Ms Allen said that after a proud trading history, spanning more than 90 years, the Godfreys Group was “deeply saddened” to announce it had made the “very difficult decision” to appoint voluntary administrators.

The opening of a new Godfreys store in Gympie. Picture: Patrick Woods / Gympie Times

She noted her late father, Mr Johnston, had re-entered the workforce at 100 years old to guide the company.

“He valued our employees, many who have been with us for up to four decades. Godfreys’ employees and customers are at the heart of everything we do and it’s a very emotional time.”

She said despite best efforts to improve profitability through various platforms, unfortunately, Godfreys had been hit by conditions beyond its control, including the weakness in discretionary spending by consumers, which has had an ongoing and significant impact on

sales.

“While it’s deeply regrettable, we need to take this action. This decision has been made in the best interests of our employees, together with our customers – it’s about securing the company’s future.

“I am so proud of our employees and franchisees and thank them for their ongoing dedication and commitment to maintaining outstanding service and satisfaction to our customers across what’s been an unprecedented and very challenging period.”