One third of Fletcher Jones stores will close and 61 staff will lose their jobs as its administrator cuts costs in an attempt to sell the business.
Administrator Cor Cordis said 15 of Fletcher Jones’ 45 menswear outlets across Australia would close immediately.
Fifty three retail staff and eight in head office have taken redundancies.
The remaining 30 stores will continue to trade as normal.
The decision was difficult and some staff were in shock, Cor Cordis partner Bruno Secatore said on Wednesday.
Possible buyers indicated they were not interested in some of the stores that would be closed, Mr Secatore said.
He said all 15 stores to close were “bleeding”, having posted losses in the past six months, which forced the decision.
“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,” he told reporters.
“As administrators, it was important that we acted quickly to shore up the viability of Fletcher Jones to make it an attractive acquisition so it can keep trading.”
Nine of the 15 stores to close are clearance shops containing ‘low-grade’ stock at DFO outlets.
Some of those are at airports where rents are traditionally high, squeezing margins even further.
Mr Secatore said he would not comment on past business decisions but admitted rent was a major factor in the closures.
“It just gets back to demographics, the stock mix. Rent, which is a killer for any retailer, has been a significant cause,” he said.
“There’s nine clearance centres, the type of stock in there has seen its day.”
The high-profile clothing retailer went into administration last week after almost a century in business, becoming the latest victim of the retail slump.
Mr Secatore said sales agents Canterbury Partners had received 10 serious expressions of interest from Australian retailers so far.
Indicative offers are due on Friday, December 23 but the administration period is likely to be extended.
The administrators are due to provide recommendations to creditors by January 23.
The staff to lose their jobs will be paid their full entitlements, costing about $600,000 in total.
The company also owes about $8.5 million to unsecured creditors and is also liable for rent on the closed stores.
