Menswear Chain Fletcher Jones Another Victim of Retail Weakness

Another Australian retailer fell victim to the weak business environment. Menswear chain Fletcher Jones will close one third of its outlets and lay off 61 employees.

Among the stores that Fletcher Jones will shutter are the one in Warmambool in Victoria which was where the retailer opened its first outlet about a hundred years ago. Most of the 15 chains it will close are clearance outlets such as those at Birkenhead Point, Brookvale, Campbeltown, Hornsby, Miranda and Rouse Hill.

Bruno Secatore from administrator Cor Cordis said the remaining 30 Fletcher Jones shops across Australia will operate normally. The 15 shops that would be closed are those that had posted substantial financial losses in the past six months, he explained.

"We would have been trading at a loss. It would have just held up the sale process with all 45 stores, and it would have meant a prospective purchaser was looking at stores that we knew were not attractive," Mr Secatore said in a statement.

He assured that the laid off workers would be paid their entitlements such as annual leave, long-service leave and redundancies. The administrator will also make available counselling services for soon-to-be terminated employees from the 15 stores.

The 15 outlets will close their doors by Friday, which would mean the remaining workers will be busy inventorying the remaining merchandise and removing the suits, shirts and ties from the stores.

Fletcher Jones was placed on administration on Dec 8 after its debt to 180 unsecured creditors reached $8.5 million. Mr Secatore said offers from prospective buyers must submit their bids by Dec 23, although the sale would unlikely be before January. He disclosed that sales agents Canterbury Partners have so far received 10 serious expressions of interests.

Besides poor sales, Mr Secatore attributed the closure of the 15 outlets to high rentals, competition from made-in-China clothes and weak economic climate.

David Fletcher Jones opened the menswear stores in 1918 and became known for its affordable men's suits. The Dimmick family of Geelong bought the store in 1995.

Creditors of Fletcher Jones will hold their first meeting in Melbourne on Monday.