Miniso collapses for a second time in Australia (2024)

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Miniso collapses for a second time in Australia

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Yesterday, 03:52 PM, updated 9h ago

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Chinese variety retailer Miniso collapses for a second time
By Jessica Yun
May 30, 2024 — 5.00am

Chinese variety store Miniso’s local business has called in administrators for a second time as customers pull back on spending amid the ongoing cost of living crisis that has claimed businesses from both the big and small end of town.

Miniso Master Franchisee, which underwent a restructure in 2020, appointed insolvency firm Jirsch Sutherland’s Melissa Lau, Andrew Spring and Peter Moore as administrators on May 13.

Miniso has appointed administrators for a second time. Credit: Ben Rushton

“The business has suffered from all the normal market forces over the last few years, whether that be labour costs, supply chain issues, rising cost of living and inflationary pressures on discretionary spending – it’s all there,” Spring said.

The administration impacts about 140 employees from 21 stores across Australia, 13 of which are corporate and eight of which are joint venture stores. A further 18, operated by franchisors, are not under Jirsch Sutherland’s control, but are indirectly impacted by the future of the master franchisee.

The stores under administration include Burwood, Castle Tower, Galeries, Parramatta, Rhodes, Sydney Central, Top Ryde, and Hornsby in NSW; DFO South Wharf, Highpoint shopping centre, Spencer Outlet, Northland and Box Hill in Victoria; Pacific Fair in Queensland; and Westfield Carousel in Western Australia.

Almost all have continued trading as normal. The administrators are in talks with the Guangzhou-based parent company to see if it can offer support for the Australian business.

“That’s largely what the initial stages of the rescue proposal is, whether there’s some way for HQ in China to step in and support the Australian entities,” Spring said.

“It’s still early days in the process, but they’re amenable to the discussion. They’ve obviously got to assess the position themselves and form a view, but we’re hopeful.”

The director of Miniso Master Franchisee, Ben Yip, is also understood to be “exploring options to raise further funding”. No other third-party entity has expressed interest in acquiring the stores so far.

“The objective of the administration is to preserve the business for not only the employees [but also] other stakeholders and obviously franchisees in this scenario as well. We’re all working together to try and create an outcome where the business survives.”

A creditors report is expected to be completed by the end of next week, with a second creditors meeting expected the week after.

Miniso’s Pitt St store stocked with Marvel products in 2019. Credit: Ben Rushton

Miniso Master Franchisee handed the reins of the business over to Grant Thornton administrators Philip Campbell-Wilson and Said Jahani in July 2020 after COVID-19 lockdowns hit the variety store hard.

Only two unprofitable stores (Southland, Victoria, and Merrylands, NSW) out of 32 stores had to close and about 100 jobs were saved as a result of the restructure, in which administrators restructured rental agreements with landlords.

Creditors claimed more than $18 million, a figure that would have become $49 million if Miniso had entered liquidation and terminated store leases.

“That’s the rock and roll of retail, unfortunately,” said a figure close to the restructure who requested anonymity.

“When you come out of a restructure, you need a couple of things to go their way, such as consumer sentiment coming back. They always need funding out of the back of a deed of company arrangement.”

Miniso was founded by Chinese entrepreneur Ye Guofu in 2013 and opened its first store in Guangzhou before expanding to Hong Kong, Singapore in 2015, and Malaysia before setting up in Australia.

The variety retail chain store sells cosmetics, stationery, toys, kitchenware and other household goods and has been inspired by retailers such as Muji and Daiso. Its logo and branding colours resemble that of Japanese fashion retailer Uniqlo and its logo initially featured katakana in its logo.

In August 2022, the company apologised for pretending to be Japanese and said it was a “proud Chinese brand through and through” and would “de-Japanise” by March 2023.

Source: https://www.brisbanetimes.com.au/business/c...528-p5jhdd.html

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