AUDIO VISION GROUP OF COMPANIES
Retail; Western Cape; Annual Turnover R70 million
The business rescue proceedings were launched via court application on 26 July 2013. The Companies were placed under business rescue and supervision in terms of the Court Order. The Companies had stores in the Canal Walk Shopping Centre, Tyger Valley Centre and Victoria & Alfred Waterfront.
The Companies employed 57 employees in total consisting of sales people, administrative staff, logistic staff, instillation teams and management. The Group of Companies are specialist consumer electronics stores that handles a variety of product categories from basic audio visual equipment and accessories to full scale home installation and theatres.
The reason for the failure of the Companies were as follows:
The Companies had to meet more stringent requirements as a Samsung partner, by issuing an 8 week forecast for all Samsung stock required, over and above the current months’ stock deliveries. This became a financial problem as their main supplier and thus creditor, Group Appliance, had to issue order numbers for the stock on forecast, effectively buying 2 months’ worth of stock in advance.
Subsequent to the appointment of the BRPs the major supplier agreed to supply post commencement supply in an attempt to raise the stock levels which in turn would increase the gross turnover for the benefit of creditors. An amount of R3 million was afforded by the supplier that effectively raised the turnover during the first trading month by more than R1 million. The creditors approved the business rescue plans that included the following:
- All employees to be retained.
- A compromise was reached in the amount of 28,2c/R1.
- The Companies continued to trade and the suppliers were afforded an opportunity to continue with their relationship with the Companies
The assignments only lasted 4,5 months where after the Companies continued with its trading activities.