Customers will have to spend money to redeem gift cards at Barbeques Galore after the Australian retailer ran out of cash and was handed over to administrators and receivers, leaving 500 jobs hanging in the balance.
Directors of the barbeque and outdoor furniture chain appointed Grant Thornton’s Philip Campbell-Wilson, Lisa Gibb and Matthew Byrnes as voluntary administrators on Thursday to investigate options for the collapsed business.
Chief executive David White said management was excited to turn the chain of nearly 100 stores around, and “considerable” progress had been made, but pointed to cash flow as the problem.
“Ongoing liquidity challenges have led to the necessary restructuring of the business,” he said.
Barbeques Galore orders that have been paid for in part or full will still be fulfilled unless there is no remaining stock, but gift cards can only be redeemed if a customer spends twice their value.
Customers will have to spend an additional $2 to redeem every $1 of their voucher. For example, a purchase of $150 must be made to redeem a gift card of $50, with $100 to be paid on top.
A secured creditor has also appointed management consulting firm Ankura’s Quentin Olde, Luke Pittorino and Liam Healey as receivers. The company will continue business as usual as they work to either restructure or sell the business.
Barbeques Galore has 68 company-owned stores and 27 franchises across the nation, with about 500 staff in total.
The company has been owned by a string of private equity firms over the past two decades. It was listed on the US NASDAQ exchange from 1997 until 2005, when it was bought by Australia’s Ironbridge Capital. Quadrant, another buyout firm, purchased a controlling stake in 2012 and the rest in 2016.
But The Australian Financial Review reported late last year that Gordon Brothers, an international retail investment firm, had bought Barbeques Galore for a “nominal amount”.
Olde, one of the receivers, claimed Barbeques Galore was an iconic and successful retailer selling premium products.
“We expect strong interest from both retail operators and strategic financial investors seeking to participate in its future,” he said.
“The business will continue to trade as normal under the control of the receivers with the guidance of David White and the Barbeques Galore team while we assess options for its future.”
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Jessica Yun is a business reporter covering retail and food for The Sydney Morning Herald and The Age.Connect via X or email.