Retail Chains, Watch Works and Cobbler Plus, Saved
Tough retail market conditions have resulted in a number of recent high-profile collapses. These conditions were the same issues facing Watch Works Australia and Cobbler Plus Services when the Director appointed FTI Consulting as Voluntary Administrators.
The companies had a large footprint, operating 120 self contained kiosks across Australia, providing watch and cobbler repairs and other ancillary services and products for over 25 years. At the time of our appointment, they employed approximately 240 dedicated staff, with an average tenure of nearly 6 years.
Issues faced by the businesses
The companies fell victim to the declining retail industry, with a reduction in customer numbers and increasing costs as a percentage of turnover.
The director sought to renegotiate retail leases and reduce overall costs but he was ultimately unable to implement a turnaround strategy and reduce the companies’ cost base. With cash quickly dissipating, the director took swift action appointing voluntary administrators in time for them to be able to successfully restructure the business. This quick and decisive action undoubtedly helped save the business.
Our role involved the following key actions:
It was critical to initiate immediate discussions with employees and landlords so everyone knew what to expect from the administrators and that we would deliver on the agreed strategy. We proactively engaged with the media to ensure the right message was put forward and that customers knew that it was ‘business as usual’. These initial communications were critical in providing certainty to all key stakeholders and clearing the runway for the administrators to restructure the businesses.