Two prominent Melbourne pubs operated by artist-turned-publican Tracey Lester, the Carlton Club and the Windsor Castle Hotel, have entered voluntary administration as they face severe financial difficulties. The venues, beloved parts of Melbourne's hospitality scene, owe approximately $1.5 million to creditors, with the Australian Taxation Office (ATO) submitting claims for outstanding superannuation.
Located on Bourke Street, the Carlton Club is known for its multi-level layout and rooftop bar, captivating patrons with its lively atmosphere. The Windsor Castle Hotel, adorned with three distinctive pink elephants on its roof, has been serving locals near Chapel Street for years. Both pubs have been helmed by Lester under leasehold agreements for over two decades.
According to Tracey Lester, the past few years proved to be incredibly challenging as the COVID-19 pandemic wreaked havoc on the hospitality industry. "The past few years have been incredibly challenging as we navigate the continuing impacts of the COVID-19 pandemic on both The Windsor Castle and The Carlton Club," she stated. The pandemic has forced many establishments to reevaluate their operations, resulting in financial hardships.
Specific figures reveal the extent of the financial troubles. Major creditors include the ATO with claims amounting to $1.12 million, primarily over unpaid superannuation contributions. Other creditors, including National Australia Bank, are part of the group to which unsecured debts total around $1.5 million.
Lester expressed her commitment to working closely with her advisers and legal team to find the 'best possible outcomes' for her team and the community. "We are at the closing end of a restructuring process, and I remain committed to working closely with my advisers and legal team to achieve the best possible outcomes for my team, for these much-loved, iconic Melbourne venues," she added.
Now under the care of administrators Shaun Matthews and Rachel Burdett from Cor Cordis, the Carlton Club and the Windsor Castle Hotel continue to operate during the administration process. On December 9, the administrators held meetings with creditors and discussed urgent proposals for either restructuring the operations or potentially selling the businesses.
One prominent option on the table is a Deed of Company Arrangement (DOCA), which would establish a binding agreement between the business and its creditors to avoid liquidation. This approach aims to provide the venues with another chance at recovery, reflecting Lester's hope for the future of the establishments.
Lester had previously advertised the possible sale of her beloved pubs, hinting at her concerns prior to the financial collapse. On social media, she promoted the sale of the Windsor Castle Hotel, stating, "After 24 years, it’s time to pass my beloved ‘second child’ on to its new custodian who can look at [it] with fresh eyes and inject some new energy and FUN." For the Carlton Club, she encouraged expressions of interest, asking, "Ever dream of owning your own bar?" as part of promoting its availability for new ownership.
The situation for both pubs is alarming but not unique; the impacts of the pandemic have been felt broadly across the hospitality industry. Just months earlier, the Carringbush Hotel faced bankruptcy, succumbing to $1.2 million worth of debt, highlighting the challenges faced by popular venues seeking to stay afloat.
The administrators are working diligently to assess the financial position of both pubs, with hopes to provide regular updates to stakeholders involved as the situation evolves. “We’ve commenced an urgent review of the financial position of The Carlton Club and The Windsor Castle Hotel,” Burdett confirmed, emphasizing the urgency of the situation.
Looking forward, the community and patrons of these iconic Melbourne venues remain hopeful for their salvation, as stakeholders search diligently for investors willing to step forward. The future remains uncertain, yet the love for these establishments within their communities may well provide the necessary momentum for recovery.
