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

CROMWELL CALLS FOR FULL DISCLOSURE FROM INVESTA

CROMWELL Property Group (ASX:CRM) has claimed Investa Office Fund (ASX:IOF) has not disclosed material information ab...

FRAUD CAUSES SILVER CHEF PROFIT SLIDE

EQUIPMENT financier Silver Chef (ASX:SIV) has seen its half-year profit slide due to fraud.

The Brisbane company r...

MEGAPORT QUADRUPLES REVENUE AND INVESTS IN EXPANSION

MEGAPORT (ASX: MP1) increased revenue 345 per cent to $4.46 million in the six months to 31 December 2016, the com...

IN-STORE VETS BOOST GREENCROSS' PROFIT

GREENCROSS Limited (ASX: GXL) shares lifted 5 per cent in trading today after the Brisbane-based company posted a ...

Related News

WHY EMPLOYEE-OWNED COMPANIES ARE BEATING ASX200 SHARE PRICES

EMPLOYEE-owned companies command a higher share price than their publicly listed peers, reaping a 17 per cent prem...

RISE OF THE MACHINES HAS WORKERS SWEATING

UP TO 3.8 million Australian workers are fearful their job may soon be terminated by a robot, a new survey has shown....

LESS TALK, MORE SMALL BUSINESS ACTION IN 2017

THE future growth and prosperity of Australian SMEs could be undermined if governments lose sight of the sector...

TEST DRIVE A POST GRAD AT BOND

THERE'S only one way to really move your career into the fast lane, says Bond University, and 'test driving...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter