Axe hovers over Max
Clothing chain Max will have to close 17 stores and cut jobs if it can not reach a deal with landlords, after its stores shut for seven weeks during the coronavirus lockdown.
The shutdown had taken a considerable toll on the business, said Max Fashions managing director Jamie Whiting.
Cost-cutting, including a permanent 30 per cent pay cut for senior management, had not been enough, Whiting said.
Income was not expected to recover for some time as a result of lower consumer spending, lower foot traffic, and supply chain disruption, he said.
‘‘Thus we have had to make the immensely difficult decision to potentially make significant redundancies of a number of our dedicated staff.
‘‘We are absolutely devastated – but this decision had to be made to ensure the survival of our business.
‘‘We are a very close-knit team and to say we are proud of how our people have conducted themselves through these challenging times would be an understatement.’’
Twenty-five stores would stay open, Whiting said.
The company proposed a formal creditor’s compromise with its landlords.
If the landlords agreed to the deal, Whiting said the company was confident it would rebuild after the restructuring.
The decision was made by directors and Max shareholders, along with external advisers.
Max Fashions received $1.68 million in wage subsidy payments for 284 staff.
Other household names have been hit by fallout from Covid-19, including Smiths City, which was put in receivership last month, and Bunnings, which plans to shut seven stores.