Riot Art & Craft closes all 57 stores
Well-known art supply chain Riot Art & Craft has called in liquidators for a wind-up of its nationwide store network with almost 60 shops around Australia shuttered.
The brand will continue operating online but the move, which occurred quietly last week, has resulted in about 57 stores closing down with the loss of about 135 jobs, adding to the toll of retailers struggling with the impact of the coronavirus.
Spending on discretionary goods is down as the recession starts to bite and many retailers have been operating under tight restrictions, particularly in Melbourne, where more closures are expected.
The owners of Riot Art and Craft called in Dye & Co as liquidators for a creditors voluntary winding-up on October 19, ending a 46-year run of physical operations.
The company was billed as Australia’s leading arts and crafts specialty retailer and grew from when it opened its first store in 1974 in the Melbourne suburb of Moonee Ponds.
But the fortunes of its much-loved shops changed as the coronavirus crisis struck, leaving it with hefty debts when Dye & Co was called in.
A report provided by the directors said the company behind the chain of stores had total assets of about $2.4m, but their realisable value was much lower.
Preferential creditors were owed about $4.8m and unsecured creditors were owed about $12.2m, leaving an estimated deficiency of about $16.9m, the report said.
But like many other suppliers it was under pressure from online shopping even before the pandemic and this trend was only accelerated by strict lockdowns.
Dye & Co director Nicholas Giasoumi said the outlets had been in shopping strips and shopping centres.
Mr Giasoumi said the firm would provide a report to creditors and was hopeful that staff entitlements would be paid out by Christmas.
Further store closures are expected in coming months, partly as retailers have burned through capital in lockdowns and some are still stuck with onerous leases that favour landlords.
The listed Mosaic Brands — one of the largest fashion retail groups in Australia, with brands including Millers, Noni B, W.Lane, Katies, Autograph, Rockmans, Crossroads, beme and Rivers — has flagged substantial cuts to its store network.
The company said in its annual report that it was in talks with landlords and had won “material” rental assistance in the form of rent waivers for a “significant” portion of its portfolio. But it stuck to warnings that its store network could shrink potentially by 300 and up to 500 stores over the next 24 months.
It partially blamed some landlords for “not demonstrating a preparedness to accept or embrace the seismic shift in retail behaviour and spending patterns being seen globally”.
Travel companies have also been slashing their store networks as they cut costs while borders are closed.
Flight Centre this month unveiled plans to shut down a further 91 stores around Australia, after already undertaking cuts that have left it 332 stores, down from 740 before the pandemic struck.
This article originally appeared on www.theaustralian.com.au/property.
