Wallace Bishop warned it may not survive retail armageddon
QUEENSLAND business icon Wallace Bishop has been warned by its auditor it may not survive the brutal downturn in the retail sector if it doesn't cut costs and boost sales.
The jeweller's auditor said in December that the future of the 103-year-old company as a "going concern" was dependent on it improving its financial performance along with continued support from its holding company.
The retailer, which has 50 stores and 500 employees, made a loss of $6.07 million last year and $9.4 million in 2018, according to its annual financial report filed with ASIC.
Wallace Bishop chief executive Stuart Bishop said Monday that he was confident the business would survive another 100 years and that while trading conditions remained competitive there were signs of improvement.
The company, which has closed its Toombul and Kippa-Ring stores in recent weeks due to lease expiries, has suffered declining sales across Australia in all areas of its activities. As well as the Wallace Bishop brand, the company also owns Hardy Brothers Jewellers.
The company's auditors Merrotts said the ability of the company to continue as a going concern was dependent on increased sales targets being achieved in 2020, reduced overheads and continued financial support from its holding company.
"Should the company not be able to achieve (these things) ... a material uncertainty would exist as to whether the company would be able to continue as a going concern and therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business," the company's auditors said in the report.
Stuart Bishop told the Courier-Mail on Monday that sales in December, January and February were consistent with expectations and were showing signs of improvement on prior years. "Wallace Bishop continually reviews its store footprint as demographics and retail trends change," Mr Bishop said. "Both Toombul and Kippa Ring were closed due to lease expirations. Wallace Bishop is continually considering opportunities for new geographic and store locations."
He added the company was refreshing its new store concept and would continue to invest significantly in e-commerce. "As a result, we are seeing a considerable increase in on-line sales," said Mr Bishop.
The company' revenue fell to $66.05 million last year from $69.74 million in 2018 even as it cut employee expenses, administrative costs and advertising.
Wallace Bishop, which was founded in 1917 by English migrant Wallace Bishop, has been a household name in Queensland for generations but like retailers across the country has suffered from rising online sales and steep discounting from competitors.
The company shocked northside locals last month after shutting its Toombul Shopping Centre store after more than half a century.
The closure of the store at Toombul, where the jeweller had been a tenant since the centre opened in 1967, comes only weeks after the outlet was the victim of a ram raid.
Mr Wallace Bishop Junior, the grandson of the firm's founder Wallace Bishop Senior, told the Courier-Mail last year that retailers were doing it increasingly tough as the tight economy meant people had less money to spend.
"Today's climate is very difficult for us," said the 84-year old who remains chairman and a director of the company business. "People are looking after their money and are looking for value. This is probably the toughest period we have gone through."
It's been a brutal period for Australian retailers with Jeanswest, Curious Planet, EB Games, Harris Scarfe and Bardot calling in administrators or closing stores.