The Sam’s Warehouse store at Dubbo has escaped a first round of closures in the struggling chain but its future remains uncertain.
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The receiver for Discount Superstore Group (DSG), the business’s parent company that has “substantial debt”, today announced plans to shut 10 of the group’s 143 outlets.
Three of the 10 stores, which are all under the Crazy Clark’s banner, are located in NSW at Raymond Terrace, Warilla and Narooma.
Receiver KordaMentha Restructuring also forecast an announcement of further closures, which could come as soon as next week.
It is working to ensure about 2200 Crazy Clark’s and Sam’s Warehouse employees receive about $10 million in entitlements owed.
It was appointed this week when DSG was placed into voluntary administrators and then receivership.
In the wake of the step a sign at the Sam’s Warehouse store in Macquarie Street advertised it was closing down, but the receiver yesterday reiterated that was not the case.
KordaMentha Restructuring spokesman Michael Smith said they were dealing with 143 stores in the two chains, of which “about 100” were “trading profitably”.
“We’re trying to sell (the entity), yesterday we advertised for people to register their expressions of interest,” he said.
“Some stores will have to close, unfortunately.
“We’re still making the decision, we will be examining all the stores, particularly those that are trading unprofitably.
“There may be a further announcement of closures next week.”
He said he could not say if the Dubbo store was trading profitably or unprofitably.
Mr Smith confirmed all stores were in sale mode with “up to 50 per cent off” products, a move that was key to delivering for staff.
“We need to sell stock and the business in order for employees to receive their entitlements,” he said.
He repeated a call for the aid of Dubbo consumers.
“The best thing the local community can do to help the employees is buy the stock, go and grab a bargain,” he said.
The appointment of a receiver this week marked the second time in less than two years the businesses had fallen into financial trouble.
DSG is owned by Jan Cameron, the founder of outdoor clothing retailer Kathmandu.
It bought Crazy Clark’s and Sam’s Warehouse out of administration for $59 million in February 2013 after another of Ms Cameron’s ventures, Retail Adventures Group, buckled under debts of more than $160 million in October 2012.
This week the receiver said the latest financial woes appeared to have stemmed from a general decline in the retail sector and falling demand for discount retailers.
