Miniso Master Franchisee creditors have approved a proposal to save the business which will see 30 of its original 32 stores across Australia to remain open and up to 100 employees across the group to keep their jobs.
Voluntary administrators Philip Campbell-Wilson and Said Jahani of Grant Thornton took control of the company in July, and continued to trade the stores throughout the COVID-19 pandemic, generating a $400K cash surplus despite temporarily shutting down all stores in Victoria due to lockdown.
Creditor claims were in excess of $18 million, though this would have increased to up to $49 million if Miniso entered into liquidation, as a result of damages for the termination of all store leases.
Creditors consisting of landlords, franchisees and related parties, voted overwhelmingly in favour of the deed of company arrangement (DOCA), which was recommended by the administrators.
As part of the restructure, the administrators cut deals with all the major landlords, including Scentre and Vicinity achieving better lease terms for the business going forward, whilst protecting bank guarantees on those leases against landlord’s claims for arrears which Miniso had not been able to meet since April at the outset of COVID-19. The administrators also right-sized the business, closing two unprofitable stores in Southland, Victoria and Merrylands, NSW, and head offices in Sydney and Melbourne, with the head office operations to be run remotely until business conditions improve.
Control of the company reverted back to the Directors upon executing the DOCA on 6 October and the company is now trading as usual.
Phil Campbell-Wilson commented “it is a great outcome and shows that a Voluntary Administration done the right way can give a retailer like Miniso the opportunity to reset and trade profitably off the back of COVID trading conditions. It needed the support of franchisees, employees and commercial landlords alike which was greatly appreciated throughout the process.”
Miniso, headquartered in China, operates 3,500 stores globally across 79 countries. The brand was in the process of expanding its Australian footprint until those plans were stalled by COVID-19. Miniso’s Director, Mr Wing Kin Yip, commented that as a result of the successful restructure it has enabled them to refocus on increasing their Australian footprint to 100 stores. Mr Yip expects to open a further 15 stores by the end of 2021.
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