The administrator of the collapsed furniture retail company Furniture and Bedding Concepts, which owns Sleep City and Everyday Living, will be closing all 64 stores over the next six to eight weeks.
PriceWaterhouseCoopers (PwC) partner Michael Fung said the decision to wind-down the businesses is due to arrangements made with Hilco Merchant Australia.
“We have entered into an in principle agreement with Hilco Merchant Australia to conduct an orderly liquidation of remaining stock, both in the stores and the distribution centres. Hilco has extensive experience and a proven record of successfully managing the liquidation of store stock.=,” he said.
“This arrangement will enable us to maximise the return from the companies’ existing stock for the benefit of creditors including employees.”
As a result of this decision, all 450 employees will be made redundant but will continue their employment until the handover is complete.
“We have chosen this orderly wind down option, rather than immediate shutdown, in order to provide staff with some additional employment, albeit for only some weeks,” Fung said.
“The in principle arrangement with Hilco provides some certainty on the pool of funds available to satisfy employee entitlements. Should there be insufficient funds to pay employee entitlements in full, employees may be able to claim the balance of their entitlements under the Federal Government's, General Employee Entitlements and Redundancy Scheme ("GEERS").
“The financial position of the businesses did not allow for ongoing trade beyond this wind down period.”
The company initially entered into voluntary administration on 13 February.