Did Bunnings’ sausage sizzle send Barbeques Galore broke? Inside the collapse of an Australian icon
Australia’s barbecue season is hitting its peak, but it could not save our outdoor cooking icon, Barbeques Galore, from financial collapse this month.
The group was founded in Sydney in 1976 by Max Mason, who began selling barbecues out of his Auburn home.
Rapid expansion saw the company enter the US market by 1980 and list on the ASX six years later, but Barbeques Galore has now been losing money for years selling Australians one of the staples of our outdoor lifestyle.
Losses totalled more than $30 million over the past three financial years, while sales of its barbecues and heaters have stagnated in the $170 million range.
This is despite the market for barbeques growing strongly as Australians invest heavily in their outdoor lifestyle.
“The Australian barbecue grill market is poised for continued growth,” Expert Market Research (EMR) said last year in a report on the sector.
“Australia has a deeply ingrained barbecue culture, and outdoor cooking is seen as an essential part of the lifestyle, particularly in suburban and rural areas. This strong cultural affinity with outdoor cooking continues to drive the Australia barbecue grill market expansion.”
It indicates the group has been losing market share to rivals like Harvey Norman and Bunnings, as well as online retailers, insiders confirmed.
Barbeques Galore’s plight has been hidden from public view as it has spent more than 20 years in the hands of different private equity groups.
Ironbridge acquired the US-listed group in 2005 for $110 million when it had 150 stores in both Australia and the US. The private equity group cited the businesses’ “strong brand, high gross margins and a competitive advantage in the high-growth top-end barbecues market.”
The US business – which had been separated from the Australian operation by Ironbridge – filed for bankruptcy in 2008 during the financial crisis.
Quadrant Private Equity acquired Barbeques Galore in 2012 and extracted a dividend of $5.6 million as recently as 2024 despite ongoing losses.
Quadrant’s various attempts to sell the business came to nothing, but did gain public notoriety during the pandemic when a senior executive with private equity group Apollo Global Management, Tom Pizzey, allegedly scouted several Barbeques Galore stores while not realising he was highly infectious with COVID.
Pizzey later denied that his visit to four separate barbecue stores, including two Barbeques Galore outlets, over the space of a few hours was work-related. He was just trying to buy a barbecue, not the whole company.
At that time, Barbeques Galore executives were touting the tailwind that the pandemic was providing for its sales as the tens of billions of dollars that Aussies would otherwise have spent on travel was re-directed to home leisure.
“While other retailers may be wondering if this is as good as it gets, I firmly believe for our business the best is yet to come,” Barbeques Galore boss Angus McDonald told The Australian Financial Review in 2021 amid hints that potential buyers were circling.
He said online sales were expected to generate around $10 million of the $170 million in sales it had forecast for the 2021 financial year, and earnings were targeted at $10 million.
There is no hiding the rising costs, and stagnant sales, since then.
In the retailer’s most recent accounts lodged with the Australian Securities and Investments Commission (ASIC) in December, its auditors point to issues that “cast significant doubt on the ability of the Group to continue as a going concern”.
This includes ongoing losses, the fact that current liabilities exceed current assets, and its precarious financing.
It was the latter that proved to be the ultimate trigger. Having received waivers on debt covenants in September and December, its financial facilities were due to mature at the end of this month.
“The Group is in the process of seeking alternative financing arrangements and has agreed indicative terms with one party who is currently conducting its due diligence. Should this financing alternative not proceed, the Directors have reasonable grounds to consider they have sufficient time prior to maturity of the existing finance facilities to enter alternate financing arrangements to enable the Group to meet its debts as and when they fall due,” the financial statements said.
The board, led at the time by Quadrant’s Victor Ha, signed off on the accounts December 4.
By January, Quadrant’s board had been cleared out and the new directors quickly formed a different view.
On January 22, newly appointed board member Mark Dewar contacted Grant Thornton’s Philip Campbell-Wilson about “potential insolvency concerns”, according to documents lodged with ASIC.
The Barbeques Galore board appointed administrators led by Campbell-Wilson on February 12.
Barbeques Galore’s secured lender and owner, Gordon Brothers, a Boston-headquartered investor that specialises in distressed lending, called in receivers, led by Ankura’s Quentin Olde, the same day.
The receivers act specifically for the secured lender and will control the sale and return any surplus funds to the administrators who serve the remaining lenders and shareholders.
“The business will continue to trade as normal under the control of the receivers with the guidance of David White and the Barbeques Galore team while we assess options for its future,” Olde said.
Olde confirmed that Gordon Brothers bought out the Commonwealth Bank as the retailer’s secured lender in October last year, and acquired Quadrant’s equity stake for a nominal amount in December.
White, a retail veteran who has worked at Woolworths and Metcash, was appointed to run the business in December last year by the new owners.
This week, Olde said the receivers are running a sales process on behalf of Gordon Brothers, with bids due by next Thursday, March 5. An update is expected once the receivers have reviewed these offers, with Olde saying the sales process has generated a lot of interest.
“The business is actually trading reasonably well and under the new CEO David White, who is improving the top line and looking at costs,” Olde said.
“We think that with a new owner, it could be a successful business again.”
The group currently owns and operates 68 stores across Australia and has a further 27 franchise stores in operation which are all operating as normal. The group employs around 500 staff.
The administrators will hold the first creditors meeting on Tuesday, which will reveal the scale of debts owed to third parties including suppliers.
Aside from the losses made by Quadrant from its sale of Barbeques Galore, after selling the business for a nominal amount in December, the main impact so far has been felt by customers who bought gift vouchers and now have to spend an additional $2 in cash for every $1 in gift card value they wish to redeem.
The receivers saw it as a fair compromise to ensure these gift-card holders did not lose their money.
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Colin Kruger is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email.
