A plan to save the collapsed Barbeques Galore business has fallen through, resulting in the closure of 62 company-owned stores and the retail chain’s likely liquidation.
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Barbeques Galore, which sells barbeques, outdoor furniture, and wood heaters, first fell into administration in February.
Its secured creditor appointed Ankura’s Quentin Olde, Luke Pittorino and Liam Healey to serve as receivers and managers.
The business continued trading. The receivers heard expressions of interest to acquire or recapitalise the business, but none were deemed suitable.
In May, creditors were presented a Deed of Company Arrangement (DoCA) that would have seen the business remain under the control of Gordon Brothers, its current owner.
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Under that plan, company-owned and franchisee stores would have continued operating under one banner, preserving the majority of the 500 jobs across the business.
In a Tuesday statement, an Ankura representative said that the proposal was “overwhelmingly” supported by creditors and approved at a May 22 meeting.
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However, the DoCA was “conditional on the outcome of negotiations with counterparties, including landlords and suppliers, and their agreement to reestablish acceptable commercial trade terms moving forward”.
After weeks of negotiations, the Barbeques Galore group “reached the position where the conditions to the DoCA Proposal are not capable of being implemented”.
With no other concrete DoCA plan or sale proposal in place, a winding-up process will begin on June 16.
This will involve the “controlled” closure of 62 company-owned stores, with staff to be made redundant as the winding-up takes place.
Separately, some 27 Barbeques Galore stores, independently owned and operated by franchisees, will face “transitional arrangements” into the future.
Moving forward, the receivers will continue to trade the business and explore the sale of remaining stores and assets.
Affected employees will be paid their full redundancy entitlements, with receivers praising the “ongoing efforts and dedication” of the “wonderful” Barbeques Galore staff.
Gordon Brothers planned to provide $5 million for creditors, but as the DoCA fell through, that funding will no longer be available.
“The amount available to pay dividends to creditors will be dependent on the outcome of the disposition and asset sale process,” according to the Ankura statement.
Stores will continue honouring gift cards until June 30 this year.
But for every $1 of gift card credit, customers must front up $2 of their own money. For example, customers with a $50 gift card can redeem the full $50 only if they spend a total of $150.
Customers holding unspent gift cards past June 30 will be considered unsecured creditors.
Creditors with further questions are encouraged to directly contact administrators at Grant Thornton.
