Godfreys’ Collapse
After nearly a century in operation, Godfreys Group, the large vacuum retailer, went into administration in late January 2024.
PwC, acting as administrators in Australia and New Zealand, faced the task of keeping the brand afloat while closing numerous stores and laying off many employees. PwC cited three primary reasons for Godfreys’ financial distress:
- Lower consumer demand due to cost-of-living pressures
- High operating costs
- Increased competition
An old-fashioned retailer, Godfreys had seen competitors like JB Hi-Fi (owner of The Good Guys), Harvey Norman, and online retailers erode its market share. Its failure to sell popular Dyson cordless vacuums further hindered competitiveness. The company’s woes worsened in 2022 when it breached a covenant on an overdrawn $31.3 million debt.
insolvency Trends
Godfreys represented just one of many business failures in 2023 and 2024. According to an ASIC media release in December 2023:
- Small to medium-sized corporate insolvencies dominated
- There were 5,520 liquidations and administrations nationally in 2022/2023
- A 17.2% increase from the previous year
- The highest number of insolvencies were in:
- Building and construction (28%)
- Accommodation and food services (15%)
- Most cases…