Ferrier Hodgson denies talk of imminent deal with REDGroup Retail creditors, says more closures possible

Ferrier Hodgson, the administrator of collapsed booksellers REDGroup Retail, has played down the prospect of an imminent deal with creditors, but says more store closures have not been ruled out.

A spokesman for REDGroup Retail administrator, Ferrier Hodgson, this morning rejected reports a deed of company arrangement is on its way shortly.

He also said he was not aware of a submission from the collapsed bookseller to the Productivity Commission inquiry into the retail sector, saying the submission might have been made before Ferrier’s appointment.

According to the Australian Financial Review, REDGroup has argued parallel importation laws and the ability for consumers to escape paying GST on online purchases of up to $1,000 are hurting the retail sector, as are high rents.

“We have already explained that books are the most exposed product to online sales,” REDGroup reportedly said.

“The category is least able to cope with distortion in the local market and yet it is the category facing the most distortion as the result of regulatory settings. This is having a detrimental impact on the bookselling industry in Australia, including on jobs in the sector.”

REDGroup Retail, which owns the Borders and Angus & Robertson chains, appointed Ferrier Hodgson in mid-February.

Some 17 Borders stores and 55 Angus & Robertson stores have been closed since Ferrier’s appointment.

Last week, the 14 Gloria Jean’s franchisees trapped inside Borders book stores that are being closed by the administrators were told they would close on May 31.

Ferrier Hodgson has also been forced to deal with a threat by 25 A&R franchisees who attempted to break away from REDGroup, saying they no longer received the benefits of operating within a franchise system and the chain’s collapse had hurt their individual operations.

Marie Fitzpatrick, of Angus & Robertson Bowral, told SmartCompany this morning that the situation had not changed since a ceasefire was called with Ferrier Hodgson last month.