Radio Rentals shuts down ALL of its 62 stores for good and sacks 300 workers after coronavirus saw sales plummet
- Radio Rentals is permanently shutting all stores and standing down 300 workers
- Electronics leasing firm will migrate online under a new ‘digital business model’
- Closures and resulting 300 redundancies will be undertaken over three months
- Here’s how to help people impacted by Covid-19
Radio Rentals will shut all its stores for good and stand down 300 workers after becoming the latest victim of the coronavirus retail fallout.
Parent company Thorn Group announced on Thursday it had made the ‘hard decision’ to permanently close 62 stores and selected warehouses as COVID-19 continues to melt consumer sentiment.
The core of the Radio Rentals’ business will continue to operate online and will be leveraged to develop a new, digital business model.
‘I am disappointed that we have been forced to make hard decisions regarding our staff and store network, however they have had to be made to ensure Thorn Group continues to operate and thrive in the future,’ Thorn chief executive Peter Lirantzis said in a release to the ASX.
Parent company Thorn Group announced it had made the ‘hard decision’ to permanently close 62 Radio Rentals stores and selected warehouses
The COVID-19 has wreaked havoc on retailers – pandemic continues to melt consumer sentiment
Radio Rentals started closing stores earlier this month and retailers across the nation made similar moves to absorb the blow of coronavirus restrictions and a subsequent drop in revenue.
Listed companies to temporarily close their doors and stand down thousands of staff include Myer, Kathmandu, Accent Group, Lovisa, Michael Hill Jeweller and Premier Investments, which runs Smiggle, Peter Alexander, Just Jeans, Portmans and Dotti.
The permanent Radio Rentals store closures and the resulting redundancies of about 300 casual and full-time staff at outlets and head office will be undertaken in the next three months.
Mr Liranzis said the firm intended to redevelop the Radio Rentals’ digital business model and Thorn Business Finance once the COVID-19 crisis had passed.
Gross sales at online retailer Kogan.com jumped 30 per cent in the March quarter as shoppers stocked up on home and kitchen equipment and fitness gear to weather isolation.
Kogan said gross profit grew by 50 per cent for the quarter but adjusted earnings only rose about 4.0 per cent due to a spike in costs.
Thorn said adverse business conditions created by the COVID-19 crisis were causing increased arrears in Radio Rentals and Thorn Business Finance and would result in corresponding write-offs.
‘These conditions are expected to continue to create a range of challenges and complex conditions for the Thorn business over coming months,’ the company said.
The number of Australian with a jobs has fallen by 6.0 per cent since the start of the coronavirus crisis began, with younger people suffering the worst losses
Myer was one of many Australian retailers that closed all stores in March as it battles through the coronavirus pandemic
Thorn will undertake the run-down of Radio Rentals’ loan book, worth about $123million as at March 31, which it says will be value-creating and will not draw down capital.
The run-down is expected to immediately generate significant cash, above the redundancy and other costs.
Shares in the company shot up 35.8 per cent to a near seven-week high of 11 cents by 12.10 AEST.
Thorn Group has still lost 56 per cent of its value in 2020 against a 22 per cent downturn for the wider ASX/200.
The number of Australian with a jobs has fallen by 6.0 per cent since the start of the coronavirus crisis began, with younger people suffering the worst losses.
The Reserve Bank expects unemployment to hit 10 per cent in the coming months, nearly double the 5.2 per cent rate before the outbreak.
General Pants is closing all stores until at least April 22 due to the coronavirus fallout