Cash-strapped electrical retailer, Betta Stores Limited (BSL), has been bought out by a consortium of its own franchisees after its debtors appointed receivers last month.
The buyer, Betta Stores Retail (BSR), is made up of about half of the Betta and Chandlers franchisees from around Australia (about 190 stores owned by 140 owners). The group, led by Betta store veteran, Everard Johnson, pitched together to purchase the Betta and Chandlers brands, intellectual property, IT systems and other fixed assets for an undisclosed sum.
The deal does not include debts of more than $40 million that BSL owed both trade suppliers and The Commonwealth Bank. Nor does it include eight Trustcotts Hi-Fi stores in South Australia or three company-owned superstores that BSL maintained prior to being placed in receivership.
PricewaterhouseCoopers partner and receiver for BSL, Phil Carter, said negotiations were still underway for the separate sale of these assets and for the repayment of debts.
Johnson said rounding up the finances of franchisees and negotiating the purchase has been a huge effort that was both exciting and tiring.
"Our retail members who have supported this purchase both financially and by commitment to supporting the new franchise organisation should feel very proud of their new company," he said. "The future of the brands, Betta Electrical and Chandlers, are truly back in the retailer's hands."
Suppliers too, have indicated they will continue to trade with the new entity, Johnson said.
"They are absolutely supportive," he said. "We're a very important channel for them."
Johnson said BSR would be a lean and cost effective organisation. Whereas BSL had about 85 staff prior to running into financial hardship this was cut to about 60 employees during administration and receivership. After some more staff cuts, the new entity would operate with only 34 staff.
The main victim of this cull would be administrative staff from BSL's finance department, Johnson said. For the last three years, BSL ran a central accounting unit to manage relationships with suppliers on behalf of its franchisees. Under the new model, individual stores will return to doing their accounting directly with suppliers as they had previously done.
Johnson said he hoped the remaining half of the 190-odd Betta store-owners might also choose to invest in the new company. "We would like all of our members to have a share in the business," he said.
BSL's former national retail operations manager, Ian Brown, has been appointed by the company's new owners as caretaker manager until a permanent management team is appointed.