The RedGroup Retail bankruptcy situation has taken a turn for the worse.
Administrators for the now bankrupt Australian bookstore chain conglomerate announced that gift cards would no longer be valid after 3 April. Anyone who doesn’t spend them will be SOL.
That’s not a good sign.
Several new details have come to light since I last wrote about RedGroup Retail bankruptcy.
Earlier this week the Australian Federal Court granted the Administrators for RedGroup Retail more time before they have to meet with RedGroup’s creditors. This is good; the pitchforks will be sharper and there will be more torches when the former owners of RedGroup are carried away by the angry mob.
Ferrier Hodgson, administrators for the now bankrupt RedGroup Retail, announced yesterday that RedGroup was up for sale. FH are asking for any offer to buy part or all of Redgroup.
Ouch. On the other hand, this is good news.
The administrators of RedGroup Retail held the first creditors’ meetings in Melbourne and Auckland yesterday, and it does not look good.
RedGroup owe some some $7.8 million AUD in salary and entitlements to their 3600 employees in Australia and New Zealand. Publishers and other suppliers are owed $44 million, and RedGroup also owe themselves $118 million. That last is the only secured debt, which means that it will be the first to be paid off. [Read more →]
by Darryl Adams
I originally posted this over in the comments of the Delimiter REDGroup article. I think it answers most of what went wrong, but I do admit some of the conclusions I extrapolated from the data.
My research on REDGroup is leading to me to think that it was the GFC (Global Financial Crisis) and not e-books that killed them. [Read more →]
The parent company of the Australian Borders chain (no relation to the US chain) went into administration (the Australian equivalent of bankruptcy) yesterday. Redgroup Retail then decided to go for double or nothing by pissing off the few customers they have left.
They’ve changed their policy on gift cards, and the change is probably illegal. According to the Canberra Times: [Read more →]
In what I’m sure must surely be a coincidence, the owner of Borders in Australia (and part owner of Kobo Books) has filed paperwork asking for the court to appoint an administrator. RedGroup Retail, the owner of Borders (AU), Whitcoulls, and Angus & Robertson, made this request after a board meeting today. [Read more →]
Crikey, an Australian news blog, has the tale:
Redgroup Retail, parent of the Borders and Angus & Robertson chains, has been forced to jack up prices, increase returns and extend trading terms with its suppliers, according to industry sources. The company told the New Zealand Stock Exchange in July it was likely to breach two of its banking covenants at the end of the month, with debts believed to be in the order of $50-75 million.
“A whole lot of publishers aren’t doing business with them at the moment,” a senior book publishing source told Crikey. “They are asking for payment terms to be extended to as far as 120 days, which nobody is prepared to give them. In response publishers are cutting their print runs by 30% in the run up to Christmas.” Another source told Crikey that Redgroup was looking to reduce stock on shelves, up recommended retail prices and increase return credits with publishers.
→ 2 CommentsTags:dire·financial·kobo·parent·redgroup·retail·straights
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