Small Business Restructuring for Retail — SBR for Shops & Stores

Based on ASIC data, businesses typically see debt reductions of 60-80% through SBR. However, the exact amount depends on your specific circumstances and what creditors will accept. The proposed payment must offer creditors a better return than they would receive if the company went into liquidation.

In liquidation, the company is wound up, assets are sold, and the business ceases to exist. Directors lose control, and you cannot trade. In SBR, your business continues operating, you remain in control, and you have the opportunity to reduce debts and recover. SBR is about saving the business; liquidation is about ending it.

Yes. Directors retain control and day-to-day operations continue. Stores open, customers are served, online sales continue, staff are paid, and suppliers are managed on post-appointment orders. The discipline during SBR is not accumulating new debt on existing creditor balances while the plan is being voted on.

Lease arrears form part of the plan; ongoing rent is paid on current terms. Commercial landlords generally prefer a paying, restructuring tenant to an empty shopfront. State Retail Leases Acts (NSW, VIC, QLD, SA, ACT, NT) provide tenant-protection frameworks — small business commissioners can mediate disputes. Review your lease with your practitioner for termination-on-insolvency clauses before appointment.

Every state except TAS and WA has a dedicated Retail Leases Act providing enhanced tenant protections (landlord disclosure, rent review caps, dispute mediation). These protections continue to apply during SBR and provide leverage when negotiating arrears and forward terms. Your practitioner will coordinate any state small business commissioner engagement.

Gift cards and loyalty points create contingent liabilities disclosed in the plan. Most retailers continue honouring them during SBR to preserve customer trust. Australian Consumer Law gift card rules (including the 3-year minimum expiry) continue to apply. Document your gift card and loyalty stock at appointment so the plan reflects the contingent obligations accurately.

Critical suppliers usually prefer a paying, restructuring customer to a write-off. Historic supplier debt forms part of the plan; post-appointment orders must be paid on current terms (often COD or shorter terms temporarily). Supplier relationships with strong brands can often be reinstated to normal terms once the plan is approved.

Yes. Online sales, promotional campaigns, and new-product launches help build the viability case for the plan. Payment gateway providers (Stripe, Shopify Payments) generally do not suspend accounts due to SBR alone — review merchant agreements with your practitioner for specific insolvency clauses.

SBR applies to the company, not specific stores. The plan can include closing unprofitable locations while continuing the viable ones. Multi-store retailers often use SBR to prune loss-making sites while preserving cash-generating stores. The plan outlines proposed closures and associated lease surrender costs.

Most franchise agreements require disclosure of insolvency events and some contain termination-on-insolvency clauses. However, franchisors generally prefer supporting a viable restructure to enforcing termination, particularly where territory goodwill and franchisee investment is material. Review the specific franchise agreement with your practitioner before appointment.

Consignment stock remains the consignor's property and is not part of the insolvent estate — consignors can typically recover unsold stock. Stock supplied under retention-of-title (Romalpa) clauses may be recoverable by the supplier where they have registered a security interest on the PPSR. Your practitioner will identify company-owned vs supplier-owned stock at appointment.

Some suppliers may move to COD or shortened terms temporarily while the plan is being voted on. This is usually acceptable and reverts once the plan is approved. Identify critical suppliers early and prioritise continuity planning in your 13-week cash flow model.

Directors must move quickly to a fallback: targeted renegotiation with landlord and key creditors, Voluntary Administration (VA) where creditor complexity blocks an SBR outcome, or orderly closure/liquidation where viability cannot be restored. Having a fallback ready before voting starts protects brand and customer trust.

Store-level P&L and sales history, landlord ledger and lease copy(ies), supplier creditor aging, ATO position (BAS status), staff costs and roster, store-level profitability for multi-site operations, unredeemed gift card and loyalty schedule, consignment and ROT supplier list, and a 13-week cash flow forecast. Having this material ready compresses the scoping phase.