Clive Peeters directors have been forced to call in administrator McGrath Nicol due to a mounting debt burden and collapsing sales.
Clive Peeters directors had hoped National Australia Bank would roll over long term debts totaling $38million and expand the company’s overdraft facility. However after sales collapsed for the 45 store chain in April, the directors felt it necessary to call in the administrators.
Clive Peeters was hit heavily by a $20 million employee fraud last year and was believed to be on track to return to profitability, however the sales slide in April was too much for the company to endure.
There are critics of Clive Peeters’ trading model, with Melbourne online business entrepreneur Ruslan Kogan saying Clive Peeters entering administration is a clear sign of the death of traditional retailing.
“The announcement that Clive Peeters has entered a trading halt and is going into administration goes to show that online shopping has trumped traditional bricks-and-mortar storefronts.
“These conventional retailers without a clear competitive advantage have nothing to offer Australian consumers looking for a good deal on appliances, electronics, and even furniture.
“There are other similar businesses out there like Harvey Norman and they’re clearly not sustainable business models in the age of the Internet.
“Australian consumers are smart and armed with the right online tools. They are looking to cut the fat off prices for absolutely everything from fast moving consumer goods up to luxury purchases.
“The media have reported on a general slowdown in consumer spending, and this is simply not the case for online businesses. Traditional retailers stuck in the Stone Age might be hurting, but online businesses around the country are thriving.