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Retail closures spark calls for urgent rescue package

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
26 March 2020 3 minute readShare
retail closures

With hundreds of clothing and footwear stores headed for closure this week, calls have increased for the government to enact an urgent multibillion-dollar rescue package.

Premier Investments, the owner of Just Jeans, Jay Jays, Smiggle, Portmans, Jacquie E, Peter Alexander and Dotti, said on Thursday it has no choice but to temporarily close all retail stores in Australia from 6pm on Thursday, standing down a majority of its employees.

A similar decision has been taken by Accent Group for an initial period of four weeks, while the administrators of Colette by Colette Hayman also announced that all stores would cease from close of business on 26 March, until further notice. 

Hoping to resume regular operations on 22 April, Premier Investments said this means all employees in Australia are to be stood down, except for a small number required to perform “limited essential work”.

“This means our team members will not attend work and will not be paid. We have put in place special arrangements for employees to access accrued annual and long service leave entitlements to reduce the impact over this time,” the company’s statement reads.

“Premier Investments has had to take similar decision in New Zealand, the United Kingdom and Ireland. Globally, these closures will impact over 9,000 of our employees.”

Premier also revealed that while close to 70 per cent of its stores in Australia and New Zealand are already in holdover or with leases expiring in 2020, the company now intends not to pay any rent globally for the duration of the shutdown.

“This is the hardest decision ever made by Premier — our team are our family and we want to do everything we can to keep them employed, but we believe that it is necessary and the right decision for them, their families, our customers, and the country,” the company said.

Also announcing closures, the Accent Group said in a statement filed with the ASX that from 5pm on Friday, it will shut its stores for a period of four weeks.

The closure of its Hype DC, Platypus, The Athlete’s Foot and The Trybe stores will mean that all of the company’s retail employees and the majority of support office employees will be stood down without pay for that period.

The company, however, noted that it will allow its employees to continue to accrue entitlements and access their annual and long service leave.

“The company intends to do everything possible to return the business to normal operations when environmental conditions normalise while always prioritising the safety and wellbeing of our team,” said Accent Group CEO Daniel Agostinelli.

Michael Hill, APG&Co, Mosaic Brands, Lovica, Colette by Colette Hayman close 

Earlier this week, Jewellery retailer Michael Hill said it is shutting its 217 stores in Australia and New Zealand; while APG&Co, the owner of Sportscraft, JAG and Saba fashion brands, also announced immediate closures. Similar announcements have also been made by Mosaic Brands and Lovisa.

Deloitte Restructuring Services partners Vaughan Strawbridge, Sam Marsden and Jason Tracy, who were appointed voluntary administrators over fashion retailer Colette by Colette Hayman in January, said on Thursday that all 93 stores will close. 

The closures will affect approximately 210 permanent staff, plus casuals. Stores in New Zealand have already closed as a result of government directives. 

“These are extraordinary times, and there is also no certainty that many retail operators in Australia will be able to continue trading amid so much uncertainty and with public health measures changing so frequently,” Mr Strawbridge said.

Employees are being stood down with access to certain leave entitlements and support in accessing relevant government services.

‘Step up measures’

Referring to these decisions as not only a disaster in itself, but a sign of things to come, SDA urged the government to “step up” with further measures to support the retail sector.

The union for retail, fast food and warehouse workers reiterated calls on Thursday for the urgent enactment of a multibillion-dollar Australian Retail Industry Rescue Package.

Within it, the SDA, in partnership with the Australian Retailers Association, is seeking a wage subsidy for retail workers to protect their income and their jobs, a line of credit for retailers to ensure they can continue to trade without being insolvent, and rent reduction measures in conjunction with landlords.

“Act now and thousands of retail workers will be able to put food on the table as well as paying their rent or mortgages, retail businesses will be able to be in some shape to resume business and the economy will be in a position to bounce back more strongly once the emergency passes,” SDA national secretary Gerard Dwyer warned.

“Do nothing and the welfare bill will be bigger for longer, some retailers will never open their doors again and the downturn will be longer.”

The National Retail Association (NRA) told My Business on Thursday that it, too, will support any government response that is effective in saving retail businesses and keeps workers in jobs.

“As the voice of modern retail, the NRA looks forward to working constructively with governments at all levels in the period ahead,” NRA CEO Dominique Lamb said.

“Measures that the NRA urge the federal government to adopt include nationwide rental relief, wage subsidies, financial support for sole traders and small business, and a support fund specifically designed to help industries most affected such as tourism, fitness, hospitality and retail.

“We’re also advocating for state governments to consider deferring land tax for small business and for banks to freeze repayments.”

Retail closures spark calls for urgent rescue package
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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