Barbeques Galore, a staple in Australian outdoor living since the 1970s, has entered receivership after failing to secure a buyer. The announcement was made on Thursday morning, with global advisory firm Ankura appointing receivers and Grant Thornton stepping in as voluntary administrators. Despite the financial turmoil, customers have been assured that existing orders will be honored, although gift card usage now requires a cash purchase double the card’s value.
Founded by Max Mason in Sydney, Barbeques Galore has been synonymous with the quintessential Aussie barbecue experience. The company operates 68 company-owned stores and 27 franchises across the country, with franchises expected to remain unaffected by the current restructuring efforts.
Financial Struggles and Market Dynamics
The decision to enter receivership stems from ongoing liquidity challenges that have hindered the company’s ability to meet its financial obligations. According to Roger Montgomery of Montgomery Investment Management, the receivership aims to maximize returns for secured creditors while allowing the company to continue trading.
CEO David White expressed disappointment over the situation, noting that while significant progress had been made in recent months, persistent cash flow issues necessitated the restructuring. “Management was excited to turn around the business and move to the next evolution of the brand,” White stated. “However, ongoing liquidity challenges have led to the necessary restructuring of the business.”
“This means there was an insufficient quantum of cash or receivables and inventory to meet short-term debts,” Mr. Montgomery explained.
Impact on Employees and Future Prospects
The receivership casts uncertainty over the future of nearly 100 stores and approximately 500 employees. Receivers Quentin Olde, Luke Pittorino, and Liam Healey of Ankura have emphasized that Barbeques Galore will continue normal operations while exploring potential sale options or restructuring plans.
Roger Montgomery highlighted the shifting dynamics within the home improvement and building supplies market, noting increased competition from major players like Bunnings, which has expanded aggressively into barbecue equipment. “There’s been a fragmentation of the market and an increase in smaller suppliers focusing on high-end products where Barbeques Galore once dominated,” Montgomery added.
Next Steps and Stakeholder Communications
In the coming days, the receivers will engage with key stakeholders, including suppliers, franchisees, and landlords, to discuss arrangements during the receivership period. The first creditor meeting is anticipated to take place on February 24, where further details on the company’s financial position and future plans may be disclosed.
The move into receivership represents a critical juncture for Barbeques Galore, with potential outcomes ranging from a successful restructuring to a sale or even liquidation if debts remain unresolved. As the company navigates this challenging period, the broader implications for the outdoor retail sector and its workforce remain to be seen.
