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High-profile retailer calls in administrators

Adam Zuchetti
Adam Zuchetti
20 July 2018 2 minute readShare

Australian fast-food retailer SumoSalad has gone into voluntary administration, but its CEO has said the move is about restructuring to eliminate troublesome “legacy issues” and not the result of falling sales.

Stating that it is “business as usual” for the business and its network of 85 stores, co-founder and CEO Luke Baylis said in a statement that the voluntary administration is part of “a long-term strategy to restructure and extend the brand into grocery and convenience”.

“The business has some legacy issues that has made ongoing trading challenging, despite the strength of the brand and the business model,” said Mr Baylis.


“We now need to restructure the balance sheet to address these issues and give the business the strongest possible footing moving forward.”

Mr Baylis noted that far from struggling, sales across its network are growing steadily, with like-for-like sales in the “high single digits”.


“We will look to propose a Deed Of Company Arrangement (DOCA) to ensure we can provide our creditors with the best possible outcome and plan to continue positive relations with suppliers and partners into the future.”

The restructure is expected to take up to two months to complete, during which all stores will continue to trade as normal.

Administrator Morgan Kelly of Ferrier Hodgson said this restructure will involve a sale process, to identify a strategic partner or potential buyer to build on the growing demand for healthier food options.

This is a strong brand with a viable business model. With the support of key stakeholders, we are confident that the business can be restructured successfully, Mr Kelly said.



Appearing on the My Business Podcast last year, Mr Baylis said that the business he launched in February 2003 has always tried to shape customer demand around food, rather than respond to it, while maintaining its core ethos of healthy eating.

“We were one of the firsts to pioneer the ‘design your own" concept, you know, the cut your own salad. We did that fourteen years ago, way before McDonald's or any other company had done it,” he said.

“As a business, we started off as a challenger brand, to challenge our industry and challenge the way people consume food. And as you start to evolve your business and scale up, people's expectations change.

“You're now a leader and so you've got to be very focused on innovation and driving change and... You need to invest in different areas, to not just scale up, but also maintain relevancy as you're scaling because the market's moving.”

At that time, SumoSalad had more than 100 outlets.

A number of high-profile businesses have gone into administration and subsequent liquidation over the last year, many of them retailers – with Toys ‘R’ Us one of the most recent examples.

However, voluntary administration doesn’t mean that a business is facing certain doom.

For instance, ailing television broadcaster Network Ten was revived in 2017 following an administrator-led acquisition by US media giant CBS.

The trick, according to Peter Marsden, head of restructuring and recovery at RSM Australia, is not to leave appointing an administrator too late.

High-profile retailer calls in administrators
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016. 

The two-time Publish Awards finalist has an extensive journalistic career across business, property and finance, including a four-year stint in the UK. Email Adam at [email protected]

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