The vacuum cleaner retailer Godfreys Group has collapsed, leaving administrators in search of a buyer to keep the 93-year-old brand alive as they prepare to close dozens of stores, resulting in almost 200 jobs being lost.
The specialist retailer was ultimately felled by a recent and sharp pullback in consumer spending, although it had long been suffering from a generational change in how people buy vacuum cleaners.
Administrators PwC will now try to sell the business and assets. The firm said it expects to close 54 stores within two weeks in Australia and New Zealand, resulting in 193 job losses.
The fate of the broader business, which includes 141 stores employing more than 600 staff as well as a number of franchisee-owned stores, will depend on the success of the sales process, and how a new owner might want to run the company.
Jane Allen, the daughter of Godfreys co-founder John Johnston, said the appointment of administrators was sad but necessary.
“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,” said Allen.
“Despite our best efforts to improve profitability through various platforms, unfortunately, Godfreys has been hit by conditions beyond our control, including the weakness in discretionary spending by consumers, which has had an ongoing and significant impact on sales.”
Established in 1931, Godfreys grew into one of the world’s biggest specialist vacuum retailers before going through a tumultuous period marked by a string of different owners.
It was listed on the stock exchange as recently as 2018, before being bought back by Johnston, who was frustrated with the company’s performance.
The 100-year-old died just a few months after his purchase.
PwC will restructure the business and run the sales process.
“Our aim is to move quickly to restructure Godfreys to preserve as much of the business and as many jobs as possible,” said Craig Crosbie, a PwC partner.
PwC cited lower customer demand amid cost-of-living pressures, higher operating costs, and increased competition for the financial stress.
Retail expert Brian Walker said that while society changed, Godfreys struggled to innovate.
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“Shopping for these sorts of things has become more functional,” said Walker, the chief executive at Retail Doctor Group.
“Before, of course, you’d rely on the salesperson to explain all about the vacuum cleaner. Now you go online and don’t need that level of technical expertise in the shop.
“Not all brands last for ever. Every brand has a lifecycle.”
Godfreys’ market share has been chipped away by an increasingly competitive market, including appliance retailers JB Hi-Fi, which owns The Good Guys, Harvey Norman and numerous online outfits.
It also doesn’t sell Dyson cleaners, which have a loyal following, hurting sales.
Godfreys did have some success by pushing into the growing robotic cleaner market in recent years, which have tended to sell strongly, as do cordless stick vacuums.
Another well-known Australian brand, dessert maker Sara Lee, was offered a lifeline this week after falling into administration last year due to changing tastes and buying habits.
Its administrators, FTI Consulting, have sold its operations to a private company owned by Klark and Brooke Quinn, who also saved chocolate maker Darrell Lea in 2012.
