Jeanswest has confirmed it will be closing 37 stores across Australia, and make 263 employees redundant including 21 from the business’ head office four days before the first meeting of creditors is scheduled to take place.
The 48-year-old retailer collapsed into voluntary administration on January 15, with KPMG appointed to conduct an urgent analysis of the business.
The first meeting of creditors is scheduled to take place on January 28.
KPMG administrator James Stewart said the decision to close stores so early in the administration process was difficult but necessary, and downsizing would give the business the best possible chance to attract a new owner.
“We are very mindful of the serious impact store closures and staff redundancies have on people’s lives,” Stewart said in a statement.
“However, we must also work to maximise the opportunity for this business to be sold or restructured – to give it the best chance to continue.”
The business will look to redeploy team members where possible, and that support will be provided to those impacted by store closures through Jeanswest’s Employee Assistance Program.
Prior to the closures, the 48-year-old retailer employed 988 staff across 146 stores.
A lesson for retailers
While administrators stated Jeanswest had been challenged by the tough market conditions seen across the retail industry, as well as pressure from online competition, Inside Retail contributor and 12HIGH founder Nathan Bush recently posited that the business struggled because it was left behind.
“There’s a lesson here, and it’s not only for Jeanswest,” Bush told Inside Retail.
“It’s the importance of keeping up with the customer and staying relevant sometimes means you have to be uncomfortable.
“Look at Harris Scarfe, Bardot, etcetera. There’s a similar pattern around settling for the status quo and functional retail, rather than pushing the limits to stay relevant.”
Harris Scarfe entered voluntary administration in December, and said it would close 21 stores, affecting 440 staff. Bardot as well is closing 58 stores over the next few months – eighty per cent of the retailer’s total footprint.
While January has seen several retailers commit to store closures, there is little assurance February will be any different.
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