DSG Holdings is in receivership, as owner and Kathmandu founder Jan Cameron calls it quits on her embattled discount retail chains for the second time.
As previously reported on ragtrader.com.au, Cameron bought back Retail Adventures – which included the Crazy Clarks and Sam’s Warehouse businesses – in February 2013, three months after they were placed in administration.
The purchase was made by DSG Holdings, the company owned by Cameron, for approximately $58.9 million.
However, with the company now back in the red, David Winterbottom and Rahul Goyal of KordaMentha Restructuring have now been appointed receivers and managers of DSG Holdings.
DSG operates retailers Crazy Clarks and Sam’s Warehouse with 143 stores across Australia.
This follows the appointment of Steve Nicols of Nicols + Brien as voluntary administrator of DSG Holdings.
The receivers have taken full control of the day to day operations of DSG Holdings and are working with the management of the company to explore various options whilst running a store/stock rationalisation program.
Commenting on the state of the business, Goyal said the team will “immediately exploring the going concern sale of the profitable Crazy Clarks and Sam’s Warehouse stores to interested parties”.
“All stores are currently in ‘sale’ mode so there should be plenty of great value to be had for our customers whilst we work through that process,” he said.
Crazy Clarks and Sam’s Warehouse sell a range of household goods including furniture, entertainment, grocery, pet, gardening, clothing and leisure goods.
Goyal added that it appeared that the financial pressures of DSG have been caused by the general decline in the retail sector, and particularly the decreased demand for discretionary items like those found in Crazy Clarks and Sam’s Warehouse stores.
DSG currently employs approximately 2,500 people across 143 retail outlets, has a distribution centre in Queensland and a head office at North Ryde. Employees are being advised of developments on a regular basis.
Goyal said it was too early to fully determine the receivership strategy. The immediate priority was to exit from the unprofitable stores whilst consolidating stock, and trying to effect a going-concern sale for at least part of the business.