Melbourne discount retailer Dimmeys has been placed into administration just weeks after it was fined $3 million for breaching product safety laws.
Administrator Richard Cauchi from SV Partners said it will continue to operate the retailer's 40-plus stores as it prepares to sell the 160-year-old business. He ruled out job losses ''at this point''.
''We are going through the process of assessing the viability of all the business profit centres with a view to preparing the business and its assets for sale,'' Mr Cauchi said.
He said it had already received ''a couple of expressions [of interest]'' in the business from buyers ''who have come out of the blue''.
Dimmeys, which employs 500 people, was fined $3 million in late December after the Federal Court found it had contravened Australian consumer law by selling items, including bath toys, children's swimwear, cosmetics and basketball rings, that were hazardous or did not carry compliant warning labels.
The retailer's owner Doug Zappelli, who took over the running of business in 1996, was banned from managing corporations for six years and was fined $120,000.
Supplier Starite Distributors, which is also owned by Mr Zappelli, was fined $600,000. Both companies have been banned from selling items that require warnings or high safety standards for the next six years.
Earlier this month, Mr Zappelli resigned his directorship of Dimmeys. He has been replaced by his daughter Nicole Zappelli.
Dimmeys' legal compliance officer, Ken Hampson, said the hefty fine had led to the voluntary administration.
He said its only external creditors were Consumer Affairs Victoria, who brought the most recent case against the retailer, and the Australian Competition and Consumer Commission, who successfully issued legal proceedings against it in 2011. Dimmeys was subsequently ordered to pay $400,000 for selling children's nightwear that did not carry compliant fire hazard warning labels.
Mr Cauchi said its preliminary investigations showed Dimmeys was a viable business with no ''shocking'' debts.
''From our preliminary look, the level of debt is not something that was of concern to the company because it was a fully viable trading environment.''
Dimmeys has a long history of product safety breaches. In 2001, it was also fined $160,000 for selling non-compliant children's nightwear and two years earlier was fined $60,000 for selling faulty children's bicycles.
Mr Hampson maintains the company has been ''unfairly targeted'' by the consumer watchdogs and the penalties were ''disproportionate'' to the breaches.
The first meeting of creditors will be held on January 23.