Radio Rentals will permanently close its 62 bricks-and-mortar stores, selected warehouses, and make approximately 300 casual and full-time staff redundant due to the COVID-19 induced retail downturn hitting the sector.
The business will begin trading purely online in the next three months as the changes are pushed through.
The adverse industry conditions have caused increased costs in both the Radio Rentals and parent company Thorn Group’s business models, which will result in write-offs.
“I am disappointed that we have been forced to make hard decisions regarding our staff and store network, however they have had to be made to ensure [parent company] Thorn Group continues to operate and thrive in the future,” Thorn Group chief executive Peter Lirantzis said.
“The group recently has circa $40 million cash at bank and is actively pursuing a range of cost-cutting initiatives and recoveries, through which we expect to generate increased cash flow over the next year.”
Thorn intends to re-develop the Radio Rentals online experience and business model once the COVID-19 virus has passed, however the conditions are expected to create challenges for the business over the coming months.
While the Government announced support measures for businesses there have been questions around whether the support is coming too late, with most initial payments due in early May.
About a month ago, former-chief executive of the Australian Retailers Association Russell Zimmerman told Inside Retail that many businesses needed quick support or they would collapse within four to five weeks.
“I think we have to look beyond [small and medium] businesses because these big iconic brands have leasing commitments, wage commitments, electricity, insurance… there’s only so much cash you’re going to have in any business until you run out,” Zimmerman said.
“It is essential that the Government looks at these businesses which are in absolute dire straits at the moment.”