National retail chain Johnny’s Furniture collapses

The national retail chain with stores across Australia collapsed, leaving shoppers anxiously waiting to see what would happen to purchases on hold and store credit or gift vouchers.

Retailer Johnny’s Furniture, which has three stores in NSW, four in QLD and one in Victoria, has been sent into administration due to a “significant decline in revenue”.

Shumit Banerjee of insolvency firm Westburn Advisory has been appointed to administer.

Some customers came into Johnny’s Furniture stores to find that the business had failed.

On behalf of the managers, they were handed a letter in which they announced that “an urgent assessment of the business is being carried out” and that the sale or recapitalization of the company was being considered.

“The company director has indicated his desire to honor trade and spare parts credits and we are currently working with the director on this,” the letter said.

“I am currently continuing to trade in a limited capacity. We sympathize with customers with outstanding orders and ask for your patience while we carry out our urgent assessment.”

According to Mr Banerjee, creditors who are owed money include lenders, staff, customers, the ATO, related parties and other government revenue offices.

One customer was Gold Coast woman Alana Boland, who paid $950 for an $1,800 new salon last November.

She came into the store last week to discover the company had gone into administration.

The new homeowner said she requested a refund back in April, but never received it.

“I just bought my first home at 27, I have a mortgage and I was looking forward to getting a new place to live – it kind of opens your eyes to the bad things in the world,” she told Gold Coast Bulletin.

Mr Banerjee said he expected to provide a further update to customers within two to three weeks.

“While my appointment is in its infancy, my preliminary investigations indicate that the company experienced a significant decline in revenue in the 2024 financial year, which likely contributed to the director’s decision to place the company into voluntary administration,” he said.

It comes at a hot time for retailers as the cost-of-living crisis squeezes shoppers’ disposable income, with several businesses collapsing this year.

High-profile vacuum cleaner retailer Godreys fell into administration in January and creditors owed $45m will not get their money back.

Its collapse resulted in the closure of all 160 stores and the shutdown of online operations at the end of May, while approximately 635 employees are expected to be out of a job.

There were also 25 customers who were left $18,000 out of pocket, a trustee report lodged with ASIC revealed.

In April, several retail stores of the major national Totally Workwear chain collapsed after landlords repossessed the premises while staff were dismissed from their roles despite still being owed back wages.

Last month, high-profile Australian fashion label Dion Lee Enterprise, which dresses the likes of Taylor Swift and Dua Lipa, went into administration, while an Australian start-up called Bardee, which landed its products on the shelves of Bunnings, went to court ordered liquidation.

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