Safe harbour: A potential lifeline for retail in the New Year

  • 2018 looks set to be a competitive retail environment
  • Retailers facing financial distress will be able to avail themselves of recently introduced safe harbour laws in formulating a strategic turnaround plan for the business.
  • To benefit from the safe harbour laws, directors will need to comply even more rigorously with some requirements than would be the case for a solvent company.

Oroton entering voluntary administration (VA) in early December 2017; intense media coverage of Amazon’s launch in Australia and its predicted impact on local retailers; media reports of major retailer Myer’s poor Christmas sales; a forecast drop in consumer spending due to softening house prices; these all point to troubled waters ahead for retailers leading into 2018.

As well as these strong concerns for the sector, the recent sale of the international operations of Westfield by the Lowy family to a European firm is also an indication of an outlook for the retail sector in the New Year.

As many readers will be aware, retail market conditions can be a challenge even at the best of times; they continue to be so, owing to the structural changes faced by the sector from online retail and related services.

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