Sources said Wednesday that the 20-unit chain will announce a Chapter 7 liquidation, possibly today, ending a 13-year run in the U.S. Reportedly, the chain suffered a 9 percent sales decline and a loss of $1.5 million to $2 million for the six months ended Dec. 31. U.S. dollars are converted from Australian dollars at the current exchange rate.
“We don’t know what’s going to happen,” said one sales associate Wednesday, at a Country Road store. “We expect to hear by tomorrow.”
Officials at Country Road’s offices here couldn’t be reached.
Previously, Country Road chief executive officer Ian Moir, based in Australia, said that winding down the operation was one of four or five options, pending a strategic review by KPMG.
Last November, Country Road U.S. ceo Michael Warner resigned.
“I think the writing’s on the wall there” Rod Salmon, a Johannesburg-based retail analyst with Merrill Lynch, said recently.
“I think the American operation closing is a given,” echoed Michael Kroger, ceo of Melbourne merchant banker JT Campbell.
Country Road’s problems are blamed on weak merchandising, lack of identity in the U.S. and the effects of Sept. 11. Country Road also has experienced declines in Australia and other countries where it operates. Australia accounts for 80 percent of the business.
When Woolworth’s in South Africa acquired 88 percent of Country Road in February 1998, it announced a three-year deadline to turn the company.
Ironically, the company continued to open U.S. stores. Two opened last year, at Long Island’s Roosevelt Field Mall and in Boca Raton, Fla. Stores are at least 5,000 square feet.