Where it went wrong for Chickenfeed

THE once-profitable Chickenfeed began losing millions each year after management closed its Tasmanian buying office and distribution centre.  

The Jan Cameron-owned Retail Adventures, which ran Chickenfeed along with Sam's Warehouse, Go-Lo and Crazy Clark's, went into administration last month owing $270 million. 

In a statement to its 1700 creditors this week Ms Cameron said closing Chickenfeed's office and distribution centre cost it $5 million a year.  

Even after Retail Adventures closed the Tasmanian and NSW distribution centres in 2009 it continued to pay $6 million in leases on the properties.

Ms Cameron blamed $114 million in operating losses since 2009-10 for Retail Adventures' collapse along with high operating costs. 

The company's balance sheet does not look good for unsecured trade creditors, such as suppliers, who are owed nearly $97 million. 

Secured creditors include employees owed $25 million and Ms Cameron herself, who is owed $80 million. 

When Retail Adventures went into administration its liabilities came to $118 million. 

Administrator Deloitte said asset sales would need to exceed $105 million for unsecured creditors to see any money.

The company will be placed on the market with final bids accepted no later than January 31. 

Until then, Ms Cameron will operate 236 stores, including  Legana Chickenfeed, under licence from the administrator.  

The stores will trade as either Sam's Warehouses or Crazy Clark's.

 Significant funding is required to trade while the sale process is conducted including $9 million worth of stock needed in the lead-up to Christmas.

The licence can be terminated  if Deloitte does not get enough money to pay redundant staff. 

Ms Cameron said the decision to put Retail Adventures into administration was not an ``easy one''.

Following her $85 million acquisition of it in 2009 while it was in  administration, Ms Cameron pumped in another $80 million to keep it afloat.  

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