PwC called in for Godfreys and Melbourne Rebels administrations

30 January 2024 Consultancy.com.au 3 min. read
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Facing separate but challenging market forces, rugby union club the Melbourne Rebels and vacuum cleaning retailer Godreys have both entered voluntary administration, with PwC called in on both.

The restructuring arm of professional services firm PwC has been engaged on two fresh headline-making administrations, that of Super Rugby club the Melbourne Rebels and the collapse of vacuum retailer Godfreys.

With its season opener less than a month away, the Rebels are reported to be more than $10 million in debt, while more than 50 Godfreys stores are likely to be shuttered over the next fortnight as PwC assesses its options.

PwC called in for Godfreys and Melbourne Rebels administrations

“Lower customer demand amid cost-of-living pressures, higher operating costs, and increased competition have all taken a toll on profitability, with some stores more impacted than others,” stated Craig Crosbie, appointed to oversee the administration alongside fellow PwC partners Robert Ditrich and Daniel Walley. “Our aim is to move quickly to restructure Godfreys to preserve as much of the business and as many jobs as possible.”

Already, some 200 jobs are likely to be lost in the immediate short-term amid the closures, which cover roughly a third of the company’s outlets and staff, with commentators pessimistic over the 93-year-old vacuum retailer’s potential to bounce back in the digital era. Online retailers have been eroding market share at a time when Godfreys is already under pressure from large discount electronics and appliance chains such as JB Hi-Fi and The Good Guys.

It’s perhaps telling that many reports on the collapse have referred to Godfrey’s iconic low-budget adverts from the 80s, while, following two decades of changing ownership, the company was taken over again in 2018 by co-founder John Johnston on the eve of his 100th and last birthday. Valued at $13 million at the time, down from around $300 million at its peak, the Johnston family are reported to have been funding growing losses in the years since.

Meanwhile, PwC has been likewise engaged on the Rebels administration, with doubts also being raised about the viability of the sport in Melbourne. Of particular concern, the rugby union club has unpaid bills with the tax office, along with outstanding stadium fees. In addition to the appointment of PwC – led by partners Martin Ford and Stephen Longley – Rugby Australia is said to have called in Deloitte NSW restructuring leader Jason Tracy as its own advisor.

“Rugby Australia is committed to ensuring the Melbourne Rebels play in the 2024 Super Rugby competitions, and we will support their preparation for the new season,” chief executive and former test player Phil Waugh said in a statement. “As custodians of the game, we are determined to ensure that RA is making responsible decisions for a sustainable and successful future, and we will work with the Rebels and the relevant stakeholders to that end.”

Those stakeholders are awaiting PwC to conduct its report, but it’s difficult to see a long-term path ahead for the club in Aussie Rules-mad Victoria when franchises in NSW and Canberra are also said to be struggling – bar the state government coming to the table with another bailout and RA continuing to pour in tens of millions of dollars to keep its fledgling local footprint alive.

The governing body has so far avoided questions on the Rebels’ future beyond this season.