Insolvency Cases

Godfreys Group Pty Ltd and associated entities (All Administrators Appointed)

Craig Crosbie, Robert Ditrich and Daniel Walley of PricewaterhouseCoopers Australia (PwC) were appointed Joint and Several Administrators (Administrators) of Godfreys Group Pty Ltd and its Australian subsidiaries (Godfreys) on 30 January 2024 pursuant to Section 436A of the Corporations Act 2001. The Administrators are now in control of the business and assets of Godfreys.

Craig Crosbie, Robert Ditrich and Daniel Walley of PwC were appointed Joint and Several Administrators of Godfreys Group Pty Ltd and its Australian subsidiaries (Godfreys) on 30 January 2024 pursuant to Section 436A of the Act. The Administrators are now in control of the business and assets of Godfreys.

Administrators have also been appointed over Godfreys’ New Zealand subsidiary, New Zealand Vacuum Cleaner Co Ltd (NZCN 1075877). Please refer to the PwC NZ insolvency website for further information, including access to frequently asked questions relating to New Zealand Vacuum Cleaner Co Ltd. https://www.pwc.co.nz/services/business-restructuring/voluntary-administration.html.

The Concurrent First Meetings of Creditors (First Meeting) were held on Friday, 9 February 2024 – a recording of the meeting is available here:

https://event.webcasts.com/starthere.jsp?ei=1654522&tp_key=49976deea4

Creditors resolved at the First Meeting to establish a single Committee of Inspection (COI) in respect of all Godfreys companies. The COI members are:

·        Ben Meredith, Executive General Manager - Sales & Operations at Godfreys

·        Bree Vare-Lucas, Executive General Manager - People & Culture at Godfreys

·        Richard Beissel of Cowell Clarke, representing 1918 Finance Pty Ltd

·        Sujata Jeraj of Bissell Australia Pty Limited, representing Bissell Australia Pty Limited

·        Leonie Chard of Scentre Group, representing Scentre Shopping Centre Management Pty Ltd

Unsecured creditors – customer claims 

We have received a large volume of queries from customers who purchased goods from Godfreys prior to the date the Administrators were appointed on 30 January 2024 and are seeking to make claims (Customer Creditors). Customer Creditors are treated as ordinary unsecured creditors in the administration.  

At this stage, we do not anticipate that there will be a return to unsecured creditors from the Godfreys administration (including Customer Creditors), given unpaid employee entitlements are significant and rank in priority for payment over ordinary unsecured creditor claims. 

Customer Creditors should assess whether they want to invest time to submit a claim when no return is anticipated. 

In light of the above, if you have submitted a request to be added to the Creditor Portal between 24 February and 9 April but have not yet received an invitation to register and you still wish to submit a claim, we request that you send a follow up email to godfreys@au.pwc.com to confirm your request. 

In the absence of a specific request from 9 April onwards, the Administrators will not be adding further Customer Creditors to the Creditor Portal.

Ongoing trading 

As advised in the media release below, after conducting a comprehensive process to identify a purchaser for the Godfreys business, no viable offers to take the business forward as a going concern have been submitted. 

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. It is anticipated that the phased wind-down of Godfreys’ operations will be completed by no later than 31 May 2024, and which point all retail stores will be closed and the business will cease to trade in Australia and New Zealand. 

The Second Meetings of creditors 

The Administrators sought orders from the Federal Court of Australia on 5 February 2024 with respect to, among other things, an extension of the convening period to hold the Second Meetings of creditors to 28 May 2024. The Administrators do not currently anticipate that they will be in a position to convene the Second Meetings earlier than this date. 

A copy of the Court orders are available on this website.

We understand you may have a number of questions in relation to the Administration. Please refer to the FAQ (frequently asked questions) document which is updated regularly and available on this website.

Godfreys Group Pty Ltd and its subsidiaries in Australia and New Zealand (‘Godfreys’) have today entered into Voluntary Administration. 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 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 (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 within the next 14 days, affecting the employment of approximately 193 staff, 171 in Australia and 22 in New Zealand.

Commenting on the appointment, Mr Crosbie said: “Like many retailers, Godfreys has faced a challenging economic and operating environment. 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.

“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.

“We will continue to work closely with Godfreys’ director, management, and creditors, including staff whose employment is unfortunately impacted by store closures,” Mr Crosbie added.

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 Friday, 9 February 2024.

For media enquiries, please contact:

Fergus Ross (Six Degrees): 0420 980 448

Ben Jarvis (Six Degrees): 0413 150 448

The Administrators of Godfreys Group of Companies (‘Godfreys’) in Australia and New Zealand advise that the process of identifying a potential purchaser of the business is advancing strongly ahead of the deadline for indicative offers on 27 February 2024.

Working in conjunction with PwC Australia’s Corporate Advisory team, the Administrators are pleased with the number of parties that have expressed interest and proceeded into the data room as part of the stage one phase of due diligence. While the details remain confidential, these parties include multiple leading retail brands and investment groups.

Administrator and PwC Australia Partner Craig Crosbie said: “The strong interest from potential acquirers of the restructured business is a testament to the enduring Godfreys brand, the loyalty of the customer base and the performance of the Godfreys team across 113 stores in Australia and New Zealand that continue to trade.”

“As the cut-off for indicative bids looms, we are encouraged by the appetite among blue chip retailers and investors to take the business forward. The quality and volume of interested parties have exceeded expectations, and we will move confidently towards evaluating the most viable offers.”

The Administrators of Godfreys Group of Companies (‘Godfreys’) today advise 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 have been submitted.

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.

Godfreys’ staff have now been informed that a phased closure of all stores will be initiated between now and 31 May 2024, unfortunately affecting their ongoing employment. This includes having to make 25 head office staff redundant as of today. 

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.

Franchisees have been informed that Godfreys can no longer support them from today. Franchised stores can trade until 31 March 2024 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 and PwC Australia Partner Craig Crosbie said that while 55 expressions of interest and 6 indicative offers were received during the sale process, these were either since 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.”