Discount chain Best&Less received windfall of more than half its $42.6m jobkeeper subsidy
More than half the $42.6m in jobkeeper subsidy received by private equityowned discount retailer Best&Less has flowed through to profit the company.
Best&Less received a profit benefit of $25.1m over the duration of the jobkeeper program last year, Guardian Australia has learned.
Details of Best&Less’s taxpayerfunded windfall have emerged because Allegro Funds is currently marketing the group for sale to investors through a listing on the ASX.
It comes amid a political storm over the use of jobkeeper by profitable companies that has resulted in many returning the payment because it was no longer needed.
On Monday, Solomon Lew’s Premier Investments bowed to political pressure and said it would repay some of the jobkeeper it received.
However one of the other business figures who has drawn heavy fire for keeping the subsidy, Harvey Norman chair Gerry Harvey, reportedly said his company would not be returning the cash.
Figures provided to potential investors in Best&Less by investment bank Macquarie and obtained by Guardian Australia show that the company received jobkeeper even though revenue grew from $608.7m in the 2019 financial year to $625m in the 2020 financial year.
The company received profits from jobkeeper of $11.4m in the 12 months to the end of June last year and $14.1m after that, until the program expired in September.
“With the onset of Covid-19, we experienced a dramatic fall in customer traffic and sales and subsequently qualified for jobkeeper like many other businesses,” a Best&Less spokesperson said.
“Covid-19 put our entire business under threat. Without access to jobkeeper, we would have had to close a large proportion of our stores, and potentially all of them, and let go of a large number of our dedicated employees.”
“We have used these funds to support our business and exactly as intended.”
The use of jobkeeper payments to support dividends paid to shareholders, dubbed “dividendkeeper”, has also been controversial, but Best&Less’s spokesperson said that “the benefit of jobkeeper recognised over the duration of the scheme has not been used in the calculation, nor the funding, of dividends”.
Labor frontbencher Andrew Leigh said Best&Less “raked in millions of dollars in corporate welfare from the jobkeeper program”.
“Yet again, jobkeeper was best for the billionaires, but did less for the battlers.”
Allegro Funds bought Best&Less in December 2019 from Greenlit Brands, the Australian arm of troubled retailing multinational Steinhoff International, as part of a job lot that also included discount department store Harris Scarfe.
Macquarie and broker Bell Potter began pitching the company to potential investors last week, telling them the group had growth potential through its babywear range.
The company is worth between $359m and $479m, Macquarie told potential investors.
Companies that have repaid jobkeeper so far include Nine Entertainment, Nick Scali, Super Retail Group and Toyota.
On Monday, Lew’s Premier said it would return $15.6m, which it said was the “net benefit” received from the jobkeeper program, after profits rebounded strongly after last year’s coronavirus lockdowns.
However, it is not returning the entire jobkeeper subsidy it received, which has been estimated at between $75m and $100m.
Premier said it previously set aside the $15.6m for use in future lockdowns.
“Critically, after the lockdowns and upon reopening, increased trading from the combined states has fully offset the cost of supporting our teams through these lockdowns,” it said.
As a result the money was “ultimately not required to support our teams”, it said.