Sumo Group: voluntary administration is part of a long-term strategy
The company said it is ‘business as usual’ for some 85 SumoSalad stores.
The Sumo Group has issued a statement about being placed into voluntary administration earlier this week by its management, stating that the move was part of a long-term strategy to “restructure and extend the brand into grocery and convenience.”
While operations would be handled by appointed administrators, Sumo Group chief executive officer Luke Baylis expects the 85 SumoSalad stores to “continue trading as normal” during the restructuring process which they expect to take between 35 to 60 days.
While citing single-digit growth in like-for-like retail sales, Baylis also noted “legacy issues” posing as challenges for the brand.
“The business has some legacy issues that has made ongoing trading challenging, despite the strength of the brand and the business model. We now need to restructure the balance sheet to address these issues and give the business the strongest possible footing moving forward,” he said in a statement.
Sumo Group recently appointed Peter Gothard and Morgan Kelly of Ferrier Hodgson as administrators, who will also assess the Group's financial positions.
According to Kelly’s letter to creditors, they were initially contacted by Baylis on June 25 to consider the appointment. They had succeeding meetings with the Sumo CEO on June 27 and July 3 and had various telephone conversations with him and Glenn Toohey from June 25 to July 17.
The administrators will have their first meeting with creditors on July 30.
“We will look to propose a Deed Of Company Arrangement (DOCA) to ensure we can provide our creditors with the best possible outcome and plan to continue positive relations with suppliers and partners into the future,” Baylis added.
(Photo credit: SumoSalad Facebook page)
