Furniture chain collapses into administration

Whitehorse Furniture and Bedding entered into administration yesterday in a further blow to the retail sector. 

The Melbourne furniture chain turns over around $10 million a year and has stores in Dandenong, Frankston, Hoppers Crossing, Moorabbin and Preston.

The stores operate with the slogan “The look you want… for less”.

Stephen Dixon and Michael Humphris of Grant Thornton have been appointed as administrators. 

Dixon told SmartCompany Whitehorse Furniture and Bedding’s five stores will continue to trade in the short term.

“We are assessing the position of each store and looking at which are sustainable and looking to restructure the company,” he says. 

“The loss-making stores, we will look at what we can do at this stage.”

Dixon says there appears to be two key factors behind the chain’s collapse: falling sales and a hasty expansion.

“Firstly, sales have declined compared to previous years and, secondly, I think they expanded too quickly. He had three stores and went to five too quickly in a short space of time,” Dixon says. 

There are 20 employees and Dixon says their jobs will be kept for the time being.    

Whitehorse Furniture and Bedding’s administration follows the collapses in recent years of the Sleep City furniture chain, which saw the closure of 64 stores, and designer furniture retailer Living Edge. 

David Gordon, corporate finance and business transformation partner at Lowe Lippmann, told SmartCompany times are tough for small independent furniture retailers.

“The small independents in the current market are being squeezed because product is manufactured overseas and they can’t do it as economically or as volume based as the larger guys,” he says.

“Because of that, they can’t have the variety of stock and they are all selling on a volume basis so their margins are under pressure.”

Gordon says small independents are also impacted by the focus of consumers on “reducing the risk” when making larger purchases like appliances and furniture.

“Reducing the risk means going into somewhere they can trust,” he says.