Hooters Australia could be finally shutting down for good. Picture: Adam Yip
Hooters Australia could be finally shutting down for good. Picture: Adam Yip

Hooters Australia is in trouble again

HOOTERS Australia has once again been placed in voluntary administration, less than two years after its new owner vowed to breathe fresh life into the controversial "breastaurant" chain.

It's the latest blow for the American sports bar, infamous for its scantily clad waitresses dubbed "Hooters girls", which has struggled to gain acceptance in the Australian market since opening its first location more than a decade ago.

Documents filed with the corporate regulator on Wednesday show Veritas Advisory has been appointed as administrator for Hotr Australia Pty Ltd and its subsidiary companies that operate Hooters restaurants in Parramatta, Penrith, Campbelltown and the Gold Coast.

Veritas Advisory said in a statement that Hooters was "up for sale". "Hooters has been placed into voluntary administration in order to give the company some 'breathing space' and help the owner reassess the business and his involvement moving forward," it said.

It said it would be "business as usual" with the restaurants continuing to trade during the administration period, which is expected to take up to two months.

The business employs around 120 people. Hooters previously entered voluntary administration in 2015 but was rescued by US listed restaurant chain Chanticleer Holdings. Chanticleer subsequently reversed course, announcing its intention to exit the country.

It sold its 80 per cent stake in the local business, thought to be worth about $9 million, to minority owner and local chairman Sydney Borg, who vowed to "clean up the mess, continue building the business and expand to new locations".

In a text message, Mr Borg said he was overseas and "can't talk at present".

The first creditors meeting will be held at 11am on Monday, August 6 at Veritas Advisory's Pitt Street offices in the Sydney CBD. The administrators are David Iannuzzi and Vincent Pirina.

"The voluntary administration process is designed to provide an independent expert review on the performance of a business with the view of maximising the return available for all creditors," Mr Iannuzzi said in a statement.

"It gives Hooters some breathing space which in turn helps to stabilise and if necessary, restructure the business either with the current owner or a new management team or the opportunity for a sale to another player."

Veritas Advisory said Mr Borg had advised that "legacy issues as well as changes in the conditions required to meet working visas has added to the challenges in recent times faced in the competitive hospitality industry".

Mr Borg is seeking to negotiate a deed of company arrangement with creditors. Veritas Advisory said it was "currently assessing the profitability of each restaurant with a view of going to the global market and working with the American-based parent entity to maximise the ability in keeping the brand alive".

In 2016, Mr Borg said when he took control of the business, revenue was down 62 per cent. "We've clawed that back a year later," he said at the time. "There is no doubt the business has turned around, but we're in a tough market. We're not making millions, I'd be lying if I told you that."

He promised to give all the restaurants a "facelift" and roll out a new menu. One former staff member, however, said the company had been "built on complete smoke and mirrors".

"The company has been running at a loss for well over 12 months now," she said. She alleged "costs and corners" were "constantly being cut", describing it as an "absolute shame". "We've seen this day coming for a while now."

Hooters has more than 430 locations worldwide. It opened its first Australian outpost in 2006 but faced repeated financial difficulties and setbacks, protests at new store openings, a legal case over slushie machines and a fire that destroyed the Gold Coast restaurant.

According to Chanticleer's 2016 annual report, the Australian restaurants recorded an operating loss of $US6.27 million ($8.4 million) in 2015, compared with a loss of $US277,557 ($374,636) in 2014, largely due to a $US4.9 million ($6.6 million) non-cash asset impairment charge.

In 2015, researchers from the University of Tennessee said a survey of waitresses working at breastaurants, including Hooters, showed there was a "psychological toll" associated with the "sexual objectification" of the job.

"Our research suggests that although 'breastaurants' may be good for waitresses' hip pockets, they don't appear to be good for their psychological and work-related health," the researchers wrote. "Many end up dissatisfied with their jobs."

frank.chung@news.com.au



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