The Strathfield Group, who are better known as Strathfield Car Radio, has been placed into administration. Contributing to the company’s problems were poor Christmas/New Year trading and a lack of capital to buy new stock. It is also believed that two major risk insurers refused to extend credit to the troubled group.
The Strathfield board made the decision to appoint administrators BRI Ferrier in a move that could see Strathfield sell company-owned stores to franchisees. However, several franchisees that ChannelNews have spoken to have said that they doubt whether they are in a position to raise the capital or financing to support such a move.
One Strathfield franchisee said, “Life has been difficult. There is a lot of old stock in the channel and the problem was that consumers were not being given a reason to walk into a Strathfield store. I don’t really know what will happen. The Company that has hurt Strathfield more than anyone is Dick Smith. Their new stores look great and their product mix is right. Strathfield management has dabbled all over the place and the end result is going to hurt a lot of people.”
Strathfield announced the news to the market this morning after going into a trading halt last Friday. The company said any staff retrenched as a result of the restructure would receive full entitlements.
Strathfield shares, which were $4 in 2002, were on Friday prior to suspension trading at $0.06 cents. Today, the company said that the shares will remain suspended during the period of administration.
BRI Ferrier stated the Strathfield Board’s review of the business accounts found that pending a final audit review, the company is likely to be found in a “negative Net Asses and Shareholders’ Funds position as at 31 December 2008”.
A spokesperson for BRI Ferrier said that it was essential that if the company was to be successful in the future, they need to keep the doors open.”
