LIGHTS OUT FOR SLEEP CITY

Written on the 16 February 2012

LIGHTS OUT FOR SLEEP CITY

FURNITURE and Bedding Concepts today became the latest victim of the retail price war after entering voluntary administration.

PricewaterhouseCoopers (PwC) partners Michael Fung, Greg Hall and Guy Edwards will be responsible for administering the Victoria-headquartered bedding retailer trading as Sleep City – and related entities including Everyday Sleep Trading, Uinta Beds, SDM Marketing and Global Victoria.

The company employs 450 people in Sydney, Melbourne, Brisbane and Adelaide. There are four Brisbane stores, one on the Sunshine Coast and one Gold Coast outlet.

PwC confirms that none of the 64 stores have closed so far and it is business as usual.

“We are still investigating the causes behind the administration. However, we believe that the current soft retail environment is a contributing factor,” says Fung.

The Australian Retailers Association (ARA) fears that retailers cannot cope with dwindling consumer demand, which has intensified after all of the big four big banks increased interest rates.

“Sleep City is only the latest victim of a chain of retailers forced to handover to administrators or close their doors for good in the past six months,” says ARA executive director Russell Zimmerman.

“While the banks are taking measures to increase income and decrease expenses to protect their billions of dollars in profits, more and more Australian retailers will be looking at how they can even keep trading in such dire conditions.”

Zimmerman is calling for major competition reform of the banking sector. He requests that the Reserve Bank of Australia (RBA) consider pressures affecting retailers and consumers, while at the same time predicting strategies of the big four banks.

“Perhaps the best measure is for the RBA to announce a deep enough reduction in interest rates that it allows for the banks to absorb some of the cut and still pass on a significant reduction to consumers,” he says.

“At the moment, home owners have nowhere to walk due to the oligopolistic nature of Australia’s banking system, which has the big four banks holding about 90 per cent of the home loan market.”

The first creditor meeting will be held on February 23 at the Institute of Chartered Accountants in Melbourne from 1.30pm.

"The first creditors meeting is a legal requirement and will cover some technical matters regarding both the appointment of administrators - and of a committee of creditors. It is not a requirement for creditors to attend and non-attendance does not affect a creditor's rights to submit a claim in the administration," says Fung.


Latest News

HOW WEDDING WOES INSPIRED A BOOMING BUSINESS FOR MEGAN ZIEMS

WHEN she was dress shopping for her wedding in 2010, Megan Ziems (pictured left) was disappointed to discover a ma...

SPOTLESS REJECTS DOWNER'S 'HOSTILE' $1.2B BID AS IT PROMISES A STRATEGY RESET

CLEANING and catering services company Spotless has rejected a $1.26 billion takeover bid from mining services firm D...

EXCLUSIVE INTERVIEW: MEGAPORT CEO VINCENT ENGLISH ON GLOBAL EXPANSION AND HOW TO SCALE UP A BUSINESS

THE RAPID expansion of Megaport (ASX: MP1) continues with the Brisbane-based company announcing a major partnership d...

BRISBANE ENTREPRENEUR BREAKS BARRIERS IN ECO-BUSINESS

TRACEY Bailey believes that if every person understood the true social and environmental cost of every product the...

Related News

FURNITURE DISRUPTOR SET TO SHARE HIS ONE OF A KIND BUSINESS MODEL

IT'S no secret that Australians love homemaking. Their ceaseless quest to create the perfect place to call hom...

WEEDING OUT THE ASX'S BURGEONING CANNABIS TREND: 8 COMPANIES TO WATCH

A NICHE is budding on the ASX in the form of medical cannabis, an industry which has been on the country's rad...

FRESH CLASS ACTION TO REVEAL ANOTHER SIDE OF SLATER AND GORDON DOWNFALL

ACA LAWYERS has issued a formal letter of demand to Andrew Grech (pictured), managing director of Slater and Gordo...

STARSHIPS WERE MEANT TO DELIVER DOMINO'S PIZZA

NICKI Minaj may have been off the mark when she declared 'starships were meant to fly'. However, she m...

EVENTS COMING UP

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter