Radio Rentals will permanently shut all of its shops across Australia and make about 300 staff redundant, as the appliance and electronics lender becomes the first major retail casualty of the coronavirus-fuelled downturn.
ASX-listed parent company Thorn Group on Thursday said it had made the “hard decision” to permanently close 62 Radio Rentals stores and selected warehouses as COVID-19 continues to melt consumer sentiment.
The company will try to develop a new digital business model.
“I am disappointed that we have been forced to make hard decisions regarding our staff and store network,” Thorn chief executive Peter Lirantzis said in a release to the ASX.
“However, they have had to be made to ensure Thorn Group continues to operate and thrive in the future,”
Radio Rentals started closing stores earlier in April, one of scores of retailers across the nation that made similar moves to absorb the blow of coronavirus restrictions and a subsequent drop in revenue.
Listed companies including Myer, Kathmandu, Accent Group, Lovisa, Michael Hill Jeweller and Premier Investments – which runs Smiggle, Peter Alexander, Just Jeans, Portmans and Dotti – temporarily closed their doors and stood down thousands of staff.
Myer initially shut its stores for four weeks in late March. On Wednesday, it said they would remain shut until at least May 11 as the national cabinet reviewed coronavirus restrictions.
“Myer will closely monitor government measures and advice over the coming weeks, with a view to reopening stores as soon as possible,” it said.
“The reopening of stores may occur on a staged basis, taking account of applicable conditions and government measures across different states and localities.”
However, Myer has enjoyed an online boom in recent weeks – including an astonishing 800 per cent spike in web sales during the Easter weekend.
That has allowed it to recall 20 per cent of its staff to work.
Meanwhile, the permanent Radio Rentals store closures and resulting lay-offs of about 300 casual and full-time staff at outlets and head office will take about three months.
Mr Liranzis said the company intended to redevelop its Radio Rentals’ digital business model and Thorn Business Finance once the COVID-19 crisis had passed.
The company said adverse business conditions created by the virus crisis were causing increased arrears in Radio Rentals and Thorn Business Finance and would result in corresponding write-offs.
“These conditions are expected to continue to create a range of challenges and complex conditions for the Thorn business over coming months,” the company said.
The number of Australian jobs has fallen by 6 per cent since the start of the coronavirus crisis.
The Reserve Bank expects unemployment to hit 10 per cent in the coming months, nearly double the 5.2 per cent before the outbreak.