Almost 200 Darrell Lea staff will lose their jobs today as the troubled chocolate-maker shuts about half of its stores.
The company's administrators, PPB Advisory, announced today that 32 of the Australian company-owned shops will close today, which will leave their 198 casual, part-time and full-time staff out of work.
The remaining 34 Darrell Lea stores, a number of which are franchises, will keep operating.
The closures come three weeks after the family-owned confectioner announced it was going into voluntary administration, with PPB Advisory planning to sell the business as a going concern.
The move placed as many as 700 jobs at risk, although the company said at the time its 69 company-owned and franchised stores in Australia, New Zealand and the US would continue trading as normal for now.
The administrators are expected to outline which stores will close and potential bidders for the remaining operation today.
Darrell Lea has been controlled by the Lea family since founder Harry Lea began making sweets in 1917. He opened his first shop in NSW 10 years later.
PPB Advisory partner Mark Robinson said the firm had since received a number of offers for Darrell Lea, and was "advancing some parties to the next stage of the sales process".
"While [the closures are] a very unfortunate development, our objective at this time is to make Darrell Lea more attractive to potential purchasers, and help protect the interests of the remaining 480 employees," he said. "These store closures are an important step in achieving this.
"Also, these developments are in line with restructuring initiatives that Darrell Lea was considering prior to PPB Advisory's appointment."
Mr Robinson said the manufacturing and warehouse arms of the business would continue to operate as normal.
A manager of a Darrell Lea franchise said the move was a natural and positive one for the company.
"People will see it as a negative but the reality is, as the administrator says, it is actually something Darrell Lea were looking at doing anyway. You've got to cut off parts that just aren't making a dollar," the manager, who preferred not to be named, said.
"One of the reasons Darrell Lea is in the mess it's in is it's had unprofitable stores operating for too long and for whatever reason they've not bit the bullet and closed them down."
The manager of nine years said his store was still turning a profit. He had not been informed of administrators' plans for Darrell Lea's franchises.
"Even though we've got our livelihoods on the line legally we are offered no protection at all so we're obviously just hopeful that whatever outcome is favourable for us... to be fair to the administrators it would be a huge job."
- Sydney Morning Herald