Godfreys to shut after administrators fail to find a buyer

Godfreys survived for almost 100 years, selling its vacuum cleaners and running iconic TV adverts, but now the chain will shut down forever as administrators failed to find a white knight.

Godfreys’ Ascot Vale store.

After selling vacuum cleaners to Australians for almost 100 years, the curtains will finally come down on Godfreys after administrators failed to find a buyer and have been forced to close all its remaining stores and put the entire workforce of 400 out of a job.

With no interested buyer or a white knight willing to throw Godfreys a lifeline, the administrators, Craig Crosbie, Robert Ditrich and Daniel Walley of PricewaterhouseCoopers, will now begin the task of closing all its stores by the end of May and terminate the employment of hundreds of staff, both from the stores and at the retailer’s head office. Immediately, 25 staff at Godfreys head office have lost their jobs while the remaining 375 staff will see their employment terminated when the stores eventually close.

Franchisees running Godfreys stores will no longer be supported by the head office, leaving them stranded, and they must close their stores by the end of March, only a fortnight away.

Established in 1931, Godfreys was 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.

But a series of poor management decisions, badly implemented strategies, missing the stick-vac trend and a souring trading environment that has seen consumers pull back on spending has now cost Godfreys its corporate life, and it will now join the ranks of iconic Australian brands that are no more.

Godfreys, famous for its vacuum cleaner chain, collapsed into administration in late January.

Former owner John Johnston outside Godfrey original Adelaide Arcade store. Picture: Supplied

On Wednesday, the administrators of Godfreys announced that after conducting a comprehensive process to identify a purchaser for the business, no viable offers to take the business forward as a going concern had been submitted. It was initially hoped a buyer would step in to rescue some or all of the vacuum retailer, but the challenge of resuscitating the failed business – especially in the current economic environment

“With interested parties withdrawing and no satisfactory bids to acquire Godfreys store network yet received, the administrators have no other option but to commence a progressive wind-down of Godfreys’ operations in Australia and New Zealand, the administrators said in a statement.

Godfreys’ staff have now been informed that a phased closure of all stores will be initiated between now and May 31, affecting their ongoing employment. This includes having to make 25 head office staff redundant as of Wednesday.

Godfreys stores will continue to trade on an interim basis to provide a reasonable period for the clearance of existing stock, after which stores will be notified that closures will take effect and all 375 jobs will be lost.

Franchisees have been informed that Godfreys can no longer support them from Wednesday. Franchised stores can trade until March 31 to realise the value of existing stock, or alternatively return stock sold to them during the administration period to receive a credit on amounts owed to Godfreys.

Administrator Craig Crosbie said that while 55 expressions of interest and 6 indicative offers were received during the sale process, these were either withdrawn or not sufficient in securing the business’ longer-term future.

“This is not the outcome Godfreys had hoped for following a rigorous process to find a purchaser for the business that could keep the store network trading. In the absence of any further bidders coming forward as intermittent trading continues, the process of closing all remaining stores will progress over the next eight weeks.

“We recognise this is a difficult time for staff, franchisees, and other stakeholders, and we will continue to work closely with all parties to ensure they are informed and supported over the coming weeks.”

In 2018 the co-founder of Godfreys, John Johnston, who returned to take control of the ailing vacuum cleaner retailer soon before he turned 100, died. He had just turned 100 in July of that year, just weeks after he and his family took over the then publicly-listed Godfreys and returned it to private ownership.

Mr Johnston in 2018 paid $13.7m through his family investment vehicle Arcade Finance to regain control of Godfreys. When he stepped in, the company had suffered falling sales and a near-93 per cent drop in its share price since it listed in 2014. Its market value had fallen from more than $100m when it listed, to below $10m.