VIC: Buyers show interest in ailing Georges

AAP General News (Australia)
02-18-1999
VIC: Buyers show interest in ailing Georges

By Heather Gallagher

MELBOURNE, Feb 18 AAP - More than six potential buyers have expressed interest in
Melbourne's prestigious department store Georges following its declaration of financial
troubles yesterday.

The directors of Georges announced the appointment of administrator Michael Humphris
(Humphris), of accounting firm Sims Lockwood & Co, after admitting to trading difficulties
since reopening last year.

Today, Mr Humphris said Georges had assets of about $22 million but, as the business was
losing money, it was difficult to estimate a realistic sale price.

The business will be formally advertised for sale next week, but Mr Humphris said he had
already been contacted by more than six interested parties, including retail traders and
investor groups.

The interest had come from Melbourne and interstate, with no overseas investors so far
expressing interest in the sale, he said.

Mr Humphris said his key objectives were to keep the doors open while looking for a buyer
and to work within a tight four to six-week timeframe to turn the business around.

Realistically this meant severe cost cutting and he said one third of the former staff,
totalling 100, had already been retrenched.

The old Georges closed in 1995, after more than 107 years, following declining patronage.

This week's tale of woe is familiar to those who participated in the multi-million dollar
makeover and grand reopening in February last year.

The business suffered financially almost immediately and shareholders committed extra funds
in June.

In September more money was injected and a new interim management team was introduced to no
avail.

Whether Melbourne's most exclusive department store is destined to become history remains
to be seen, but those hoping to snag a bargain out of Georges' woes should think again.

"We're not looking at fire sales at this point," Mr Humphris told AAP.

"There are the more expensive labels and we will continue to appeal to that market -
there's not necessarily a need to radically discount."

AAP hmg/ra/was/de

KEYWORD: GEORGES (CARRIED EARLIER)

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