Barbeques Galore Enters Receivership as Liquidity Crisis Deepens

Australia’s largest barbecue and outdoor furniture retailer is placed under receivership this week.

Financial Woes

Barbeques Galore, which operates 68 company-owned stores and 27 franchise stores and employs around 500 staff, faces liquidity issues.  In a statement, the company’s chief executive David White said that this is the primary reason behind the collapse of the business. 

“Management was excited to turn around the business and move to the next evolution of the brand,” White said. “Considerable progress has been made in recent months leading to significant improvements across the business and operations; however, ongoing liquidity challenges have led to the necessary restructuring of the business.”

Receivers from the global advisory firm Ankura, Quentin Olde, Luke Pittorino and Liam Healey, were appointed on Thursday. The company also brought in Grant Thornton as voluntary administrator.

Restructure or Sell

The receivers said that they are mulling on either restructuring or selling the business, but the business and retail stores, including the franchise outlets will continue with their normal operation pending the next move.

The franchisee-owned stores will not be affected by the appointments and restructuring,

”We expect strong interest from both retail operators and strategic financial investors seeking to participate in its future,” said Olde, according to 9News. ”The business will continue to trade as normal under the control of the receivers with the guidance of David White and the Barbeques Galore team while we assess options for its future.”

Recovering Debts for Secured Creditors

Companies are placed under receivership to allow secured creditors to recover debts. Receivers are appointed to manage and sell assets.

”Receivership focuses on maximising the returns for the appointer of the receiver, and it allows the company to continue trading,” Roger Montgomery, from Montgomery Investment Management, explained to ABC News.

Montgomery said that the company now has tougher competition.

“There's been a fragmentation of the market and an increase in smaller suppliers focusing on high-end products where Barbeques Galore once dominated.”

The first meeting of creditors is expected to take place on February 24.