UPDATED: The consumer electronics and appliance industry has been dealt a major blow after administrators were today appointed to Melbourne based retailer Clive Peeters.Clive Peeters told the ASX today that the Board has appointed Colin McIntosh Nicol, Keith Alexander Crawford and Matthew Wayne Caddy of McGrathNicol, jointly and severally, as administrators of Clive Peeters Limited.
This month Clive Peeters said its operating loss for the three months to March 31 was expected to be $4.5 million compared with a loss of $600,000 for the same period last year.
The company employs 1300 staff members in 44 stores across Australia.
The decision to place Clive Peeters into administration is believed to have been made by the company’s bankers, National Australia Bank, who today pulled the pin on the struggling retailer after debt restructuring talks earlier in the day.
At this stage the company’s CEO Greg Smith, who is also a major shareholder, is refusing to comment.
Late last year, risk insurance companies QBE and Coalface tightened up credit control for vendors exposed to Clive Peeters. One risk insurance company, Atradius, stopped taking business associated with the struggling retailer.
Terry Smart, CEO of JB Hi-Fi, said that his group is not interested in buying the Clive Peeters business. He said, “this has been coming for a long time, the retailer is of no interest to us, however, it is not good for the industry”.
The credit manager for a major appliance vendor said, “a lot of people are going to be exposed. The insurance companies tightened control over credit, and as a result, Clive Peeters was suffering from a loss of both customers and credit, in some cases selling goods based on 24-hour delivery.
Colin Nicol, Keith Crawford and Matthew Caddy of McGrathNicol have been appointed as voluntary administrators and are conducting an urgent appraisal of the company’s affairs, the corporate recovery firm said in a statement.
They will determine if the underlying business can be preserved, so call options, including a deed of company arrangement and a potential sale, can be explored, McGrathNicol said.
Mr Nicol said, “It is hoped that the business can be stabilised and can continue to trade in one form or another beyond this administration.”
A first meeting of creditors must be held by May 28 and details of the meeting will be forthcoming, McGrathNicol said.
Shares in Clive Peeters were placed in a trading halt on Wednesday morning and the shares were suspended from official quotation by the Australian Securities Exchange immediately following the company’s announcement.
Clive Peeters shares’ most recent peak was at 70 cents on October 19, 2009.
They fell from 22 cents on May 3, 2010, to 10.5 cents on May 7, before closing at 15 cents.
More to follow