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Buyers have begun circling embattled vacuum cleaner retailer Godfreys Group with administrators revealing that big-name retailers and investment groups are among those expressing interest in scooping up the business.
However, it’s understood to be too early to determine if a buyout deal will eventuate as indicative offers have yet to be received by the administrators.
Craig Crosbie, Robert Ditrich and Daniel Walley, of PricewaterhouseCoopers (PwC) Australia, were appointed administrators to Godfreys Group last month as the company fell victim to lower consumer demand and higher operating costs.
Following their appointment, the administrators undertook an immediate sale process while embarking on a restructure that included the closure of more than 50 of the group’s 169 stores in Australia and New Zealand.
The store closures are said to have led to the loss of about a third of Godfrey’s 600 staff across Australia and New Zealand while the broader business continues to operate under the control of the administrators.
The administrators say the sale process is ‘advancing strongly’ ahead of the 27 February deadline for indicative offers.
In a brief statement issued today, the administrators say that a number of these inquiries have progressed ‘into the data room as part of the stage-one phase of due diligence’.
Godfreys administrator and PwC Australia partner Craig Crosbie says while the details remain confidential, the interested parties include ‘multiple leading retail brands and investment groups’.
“The strong interest from potential acquirers of the restructured business is a testament to the enduring Godfreys brand, the loyalty of the customer base and the performance of the Godfreys team across 113 stores in Australia and New Zealand that continue to trade,” says Crosbie.
“As the cut-off for indicative bids looms, we are encouraged by the appetite among blue-chip retailers and investors to take the business forward.
“The quality and volume of interested parties have exceeded expectations, and we will move confidently towards evaluating the most viable offers.”
Godfreys, an Australian company that also sells commercial steam cleaners and associated products, was established in 1931 by Godfrey Cohen at a time when door-to-door sales dominated the market.
Private equity groups Pacific Equity Partners and Unitas Capital paid $300 million for Godfreys in 2006 but exited the investment during the GFC as the business was struggling under excessive debt.
Cohen’s partner the late John Johnson, who first invested in the Godfreys business in 1936, bought the company back in 2011 for $100 million, supported by Nomura Bank and later Investec.
This was later followed by a brief but disastrous stint as an ASX-listed company from 2014 to 2018.
Johnston moved to privatise the company in 2018, buying it for a fraction of the company’s $2.75 IPO issue price four years earlier.
The Johnston family still owns Godfreys Group.
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