A creditor’s meeting this month agreed to the closure of stores and appointment of a liquidator, with a six week program of store closures now underway. Homeart appointed PPB Advisory on January 23 when it became apparent that it could not resolve its financial problems with total debts exceeding $13 million. PPB Advisory believes secured creditors will be paid out and most of the outstanding employee entitlements will be met from the disposal of assets, including the clearance of stock. The 199 trade creditors of the group, which includes three trading businesses, Homemart, Copperart, and and Copperart Holdings, are owed around $8.17 million, while the Australian Tax Office is owed $839,138. All of the companies in the Homeart group were owned by the Van Roest family and administrators have highlighted intercompany transfers and loans from the owners that are unlikely to recoup any funds. Homeart’s sales fell from around $83 million in 2009 when Homeart had around 140 stores nationally, to $61 million in the 2014 financial year with losses ballooning over the past three full financial years to $4.14 million in 2014. The chain had not recovered its financial position in the 2015 financial year and directors attempted to exit leases on unprofitable stores and looked for a buyer in a bid to keep trading ahead of the appointment of the administrators. PPB Advisory said the collapse of the chain resulted from the sharp decline in revenue, high fixed costs associated with lease obligations, and increased competition from online retail platforms. The attempt to find a buyer attracted 77 expressions of interest, but none of the parties lodged an offer to buy the business. The administrators indicated the business would require significant new investments and retailed commoditised products with low margins and no competitive advantage. Some parties were also concerned about the ability to secure leases with landlords likely to terminate the tenancy rights as a result of the chain’s collapse. Homeart was originally known as Copperart and included a network of franchise stores, before striking financial difficulties that prompted a restructure and rebranding as Homeart. The founder of the chain, Arrt van Roest, was an office bearer of the Franchise Association of Australia and is a former president of the Australian Retailers Association. Homeart was one of Australia’s largest specialty retailers, selling a wide range of consumer goods including household items such as homewares, manchester, electrical appliances, and furniture goods. While Homeart will close, another Melbourne-based retail chain, Man to Man, has found financial backing to continue trading. Ferrier Hodgson, the administrators appointed to the menswear fashion chain, has sold the business to a group of private local and overseas investors who have retain the founder, Alex Hampel, as CEO. After a restructure of the store network, which included the closure of around 20 outlets under administration, Man to Man now has 62 stores throughout Australia. Established in 1981, Man to Man was one of Australia’s largest menswear retail chains, but struck trouble last year in a more challenging retail market, but also as a result of a failed investment in a new chain of footwear stores. An innovative retailer, Hampel launched Stone Shoes, a footwear chain offering a product range built around three pricepoints, to capitalise on easier leading conditions, but the concept failed to gain consumer acceptance and was impacted by higher than anticipated sourcing costs. Hampel had previously established another retail concept for products for the elderly and disabled which was later sold to a medical supplies company. This story first appeared in Inside Retail PREMIUM issue 2041. To subscribe, click here.