Job losses after Kemp and Denning closes its Cambridge store

STRUGGLING Tasmanian hardware chain Kemp and Denning Limited has closed its Cambridge store with the loss of about 25 jobs.

K&D has closed its store at Cambridge Park. Image: GOOGLE MAPS

STRUGGLING Tasmanian hardware chain Kemp and Denning Limited has closed its Cambridge store with the loss of about 25 jobs.

In a letter to shareholders, chairman Greg Goodman said “an unprecedented trading environment for hardware businesses in Tasmania had led to the closure”.

“The board of directors has taken the decision to close the store prior to the end of the lease because we believe it is no longer in the interest of shareholders to keep the store open,” Mr Goodman said.

The lease had been due to run until next March.

It comes after the sale in June of the Kingston trade business to Clennett’s Mitre 10 left it with just the Hobart store in Melville St and the Cambridge operation.

MORE: CLENNETT’S MITRE 10 BUYS KEMP & DENNING TRADE STORES

In recent months the company has closed its store in Devonport and sold its Glenorchy site to developer Errol Stewart.

“We are very disappointed that the company has had to make this difficult decision and I want to thank all staff for their loyal service,” Mr Goodman wrote in the letter.

“Sadly this decision will have consequences for our Cambridge workforce and all staff affected by the closure will receive their full entitlements and additional career support as well.

“Our business in the Hobart CBD is not affected and will remain operating as normal.”

Mr Goodman could not be contacted.

MORE: JACKSON MOTOR COMPANY BUYS DERWENT PARK K&D STORE SITE

Clennett’s took over three of the K&D trade sites — in Glenorchy, Cambridge and Kingston — and has continued to serve all K&D trade account holders.

A number of K&D trade employees transferred to the Clennett businesses.

In June Mr Goodman said the sale to Clennett’s had followed a strategic review by management which resolved to consolidate the business.

“Clennett’s is an exceptionally efficient business and has become synonymous with trade excellence,” he said.

“I’m excited for the ongoing opportunities for many of our employees to join a thriving trade business.”

MORE: K&D FORCED TO RENOVATE BUSINESS

The unlisted public company has 2,683,635 shares which last traded at $3, valuing the company at $8 million.

It was worth $10.73 million on June 30 last year and $37.5 million in 2012.

Competition from Bunnings has led to a free fall in turnover from $90.08 million in 2014-15 to $81.93 million to May 2015-16.

The latest report revealed an after-tax loss of $558,846 compared with a $242,738 loss the year before.

The closure of trade operations and retention of the Melville St retail operations compares with statements in the report lodged for the 2015-16 financial year.

In a director’s report, former chairman Ray Brown said the weight of increased competition had rendered the current business model unsustainable.

“Given the intensity of the retail landscape in particular, the board has decided to transform our business so that it is predominantly trade-focused,” he said.

“During the transformation to trade, any assets that are not delivering a satisfactory return will be realised and excess capital returned to shareholders.”

In 2012 a Woolworths subsidiary John Danks and Son made a non binding indicative offer of $68 million for the 115-year-old company.