Retailers hurting as Freedom Furniture staff stood down
The cinema, hotel and ski-resort company Event Hospitality & Entertainment, chaired by billionaire Alan Rydge, has called for more help for large companies as lockdowns bite into their operations.
The extended lockdown in Sydney has prompted cries for relief to go beyond smaller enterprises to large companies.
It comes as leading national furniture chain Freedom Furniture has been forced to stand down more than 100 staff across its stores in NSW as the protracted lockdown in that state robs it of business and the tremors running through the nation’s $320bn retail sector threaten an employment disaster.
The Australian has confirmed that Freedom Furniture has taken the decision to stand down 108 staff across eight stores in NSW, with the retailer requesting affected employees access their annual leave, long service leave and any time in lieu.
It is the latest in what the retail sector is bracing for a tidal wave of job losses and staff stand downs not just in NSW but also other parts of the country as the limited government payments are not enough to keep businesses afloat.
Paul Zahra, chief executive of the Australian Retailers Association, and himself a former CEO of department store David Jones, has said the feedback from his retailer members was that wide-scale staff cuts would start to be triggered. He has also called for the return of JobKeeper.
Event, which owns a stable of cinema chains, hotels and tourism assets, received $41.7m under the JobKeeper scheme and has now called for more payments as Sydney cinemas face long closures.
Event chief executive Jane Hastings said the expectation was that an effective vaccine rollout program would mean that the impact of snap lockdowns would be mitigated, and government support would no longer be required.
“In light of the current lockdowns resulting in restrictions that are now impacting most of Australia, further support is required. We are pleased that the Business Support packages are being offered to small and medium businesses, however, they are currently not applicable to large businesses with the most employees,” she said.
“We are actively pursuing all options via our industry bodies and through direct contact with government. The group continues to take all actions within its control to mitigate the impact of lockdowns,” she said.
Event also sold off a series of properties as strict lockdowns crunch its cinema operation in Sydney and Melbourne. It has sold off $79.6m worth of property and in a reflection of rising commercial prices these were struck at a $29.8m premium to valuations.
The company‘s CineStar Germany unit remained closed throughout the second half due to German government mandates but it reopened on July 1. Event has applied for €27.5m ($43.5m) worth of support in Germany.
Ms Hastings said the property sales had enabled the company to reduce net debt levels, progress major developments and undertake key asset upgrades. “We are also in the process of obtaining updated independent valuations for the property portfolio as at 30 June, 2021, and expect a positive uplift in value,” she said.
The assets sold were the Forum Building in Brisbane, a Double Bay office complex, and Port Hacking Road, Miranda, warehouse and light industrial asset. The company also offloaded the Rydges Plaza Cairns Hotel, Cairns City Cinema and Mt Maunganui Cinemas.
Event said further non–core properties had been identified and are being prepared for sale in fiscal 2022 targeting more than $150m based on independent valuations, with more non-core properties being contemplated for potential sale in the following financial year.
Ms Hastings said that government mandated temporary lockdowns and restrictions had hit its business and there had been “a strong return to cinemas when we have quality films, and customers are spending more than they were pre-COVID-19”.