The iconic Australian retailer Godfreys is set to close all of its remaining stores and lay off 25 head office staff, leaving 550 employees across 87 stores in Australia and New Zealand facing gradual layoffs. The closure comes after no suitable bids were received to buy the 93-year-old business from voluntary administration.
The vacuum cleaner chain will be phased out between now and May 31, with the process of closing all remaining stores progressing over the next eight weeks. Despite receiving 55 expressions of interest and six tentative offers, none were enough to secure the future of the business. PwC Australia partner Craig Crosbie expressed disappointment at the outcome, stating that Godfreys had hoped to find a purchaser that could keep the store network trading.
This closure also affects the 28 franchisees, who were informed that they could no longer be supported. They have until March 31 to sell their current stock or return it for a refund. The closure of Godfreys marks the end of an era for the retailer, which has been a familiar sight in Australian retail for almost 100 years.
Godfrey Cohen founded the retail chain in Melbourne in 1931, selling door-to-door vacuum cleaners when they were unavailable for purchase in Australian stores. The retailer was listed on the ASX in 2014 but went private four years later due to tough competition from retailers like Harvey Norman, JB Hi-Fi, Amazon, and Kogan.com.
The closure of Godfreys is indicative of the challenges faced by many retailers in a changing retail landscape. Lower customer demand, higher operating costs, and increased competition have all taken a toll on profitability. Living costs have made consumers more cautious about spending, leading them to take advantage of major sales events like Black Friday and Cyber Monday.
Competitors like JB Hi-Fi have managed to navigate the competitive landscape successfully. The company reported a profit of $264.3 million in the six months leading up to December 2024, with total sales rising by 0.7 percent to $3.62 billion. White goods, small appliances, and services have been the main growth areas for JB Hi-Fi.
However, the online retail giants Amazon Australia, Catch, eBay Australia, and Kogan continue to dominate the marketplace. Amazon leads with a 24 percent share in the home and kitchen sector, followed by eBay at 16 percent, Catch at 10 percent, and Kogan at 9 percent. This intense competition has made it difficult for traditional retailers like Godfreys to thrive.
The closure of Godfreys marks the end of a century of retail history. However, it also serves as a reminder of the challenges faced by retailers in an increasingly competitive landscape. As consumers continue to shift towards online shopping and major sales events, traditional retailers must adapt and find new ways to connect with customers in order to survive and thrive in this ever-changing market.
