Aussie Disposals boss hits out at landlords over rents

The Australian camping business will close 11 of its 36 stores across NSW, Victoria and South Australia and dozens of the company’s 120 employees will lose their jobs after its sales were decimated by the catastrophic bushfires and the coronavirus shutdown.

Speaking to The Australian on Wednesday, managing director Mark Purvis said he would exit shopping centres as he moved his stores to more strategic locations.

“I made the decision about 18 months ago, before the coronavirus and bushfires hit us, because (shopping centres) just don’t get the numbers through that they used to, and the rents are just uncontrollable. You just can’t turn enough dollars to pay for the rents,” Purvis says.

“During this coronavirus period, we’ve asked for rental assistance from the shopping centres and we just didn’t get a response. It’s made it very difficult. Most of our other landlords have at least tried to work with us.”

A spokesman for the Shopping Centre Council of Australia, which represents mall owners, said the sector was working to support tenants through the downturn.

“Our members are working productively to provide relief and ensure business continuity for their small, medium and family retailers doing it tough as a result of the COVID pandemic,” the SCCA spokesman says. “This is on a case-by-case basis, noting the unique circumstances, such as location, the retailer and retail category.”

Established in 1962, Aussie Disposals’ unprofitable stores had “strangled” the business, Purvis says. However, despite the uncertain economic outlook, he hoped restructuring to a slimmer business model would see the company return to profitability during the next financial year.

Administrator Peter Goodin from Magnetic Insolvency told The Australian says it is “business as usual” for the 25 stores that remained open.

“The company actually had a two-year restructuring program in place before they spoke to me. It’s just the bushfires and coronavirus have accelerated the need to reconstruct,” Goodin said on Wednesday.

“This is actually a very good administration from the point of view of what creditors can get back. The trimming of the deadwood will allow the company to return to profitability.”

Owning the company’s Hampton Park headquarters was a “real asset” for the company, Goodin says.

The company’s management structure will remain unchanged despite the collapse.

The lost cash flow over Easter — generally a significant sales period for the company — was the final straw. The company will retain 11 stores, while its 14 franchised stores will be unaffected by the insolvency.

It is understood Aussie Disposals remains on good terms with its main lender ANZ.

In a statement, the company says its main focus was to ensure that all members of staff received their “full entitlement regardless of the company’s future”.

Aussie Disposals sells a range of camping furniture, fishing supply and snow gear, along with stocking military surplus products. “We’re an entirely Australian-owned business — there’s not many of us left, especially in retail — and we’re working really hard to keep a presence in the retail industry as a family-operated business that is 100 per cent Australian-owned,” Purvis says.

“For the soul of the country, I think it’s crucial to keep Australian business operating, for the grass roots of Australia. I’m not just saying that for me.”

With an annual turnover around $50 million, Aussie Disposals qualifies for the mandatory code of conduct for commercial rents that Prime Minister Scott Morrison announced earlier in April. The code applies a set of good faith principles for commercial tenancy negotiations.

However, Purvis says the inability to access payroll tax relief under the conditions set by the Victorian government is “devastating”.

This article originally appeared on www.theaustralian.com.au/property.