“Unsustainably high rents”: National furniture chain Focus Group collapses into administration

National homewares chain Focus Group has collapsed into administration after struggling to compete in the face of “unsustainably high rents”.

McGrathNicol partners Barry Kogan, Kathy Sozou and Matthew Caddy took control of the business earlier this week and are undertaking an “urgent review” of operations as they continue to trade the business.

The company has 38 stores across the country and four distribution centres, trading under the Focus on Furniture and BedsOnline brands.

Administrators blamed unprofitable operations in New South Wales and Queensland for the collapse, flagging a possible exit of unprofitable stores in the states.

It is hoped cutting the rot will support a restructure centred around profitable stores in Victoria, regional NSW and South Australia.

“As an urgent priority, we will be conducting a review of options for the business, including a possible exit of unprofitable stores in New South Wales and Queensland,” McGrathNicol partner Barry Kogan said in a statement.

“It is clear that Focus on Furniture outlets in these states is struggling to compete effectively and on a profitable basis in the face of unsustainably high rents.”

Administrators did not specify which stores would likely need to be earmarked for closure, but the first meeting of creditors will be held on May 27, where it is expected an update on company operations will be provided.

Focus Group is just the latest retailer to fall in the face of rental stress and mounting competition from international and local players alike.

The household goods and furniture category has been particularly difficult in recent months amid a downturn in housing prices.

Meanwhile, the growing influence of multi-national brands such as IKEA in the Australian market, as well as disruptive online players like Temple & Webster, has also ratcheted up competitive pressure.

Last year franchised chain The Outdoor Furniture Specialists — which traded across 40 stores — collapsed under similar pressure.

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