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Log In / Register | Apr 25, 2018

Retravision Franchisee Supply Co-Op In Administration

KordaMentha Australia has been appointed as administrator of Retravision Southern Ltd, the network’s central buying cooperative, amidst reports that creditors are owed $30M.  

The cooperative was jointly owned by 104 Retravision franchisees in southern New South Wales, Victoria and Tasmania but after recent unsuccessful calls to franchisees for a cash injection, Retravision Southern Ltd entered voluntary administration.

The remainder of the network in other states are not affected at all while the 104 franchisees chase new suppliers.

Retravision Southern’s collapse has cost 35 jobs and follows the February collapse of WOW Audio Visual Superstores costing another 500 jobs. Woolworths is reported to have been closing ‘dozens’ of Dick Smith Electronics stores and the sectors barometer Harvey Norman is reporting a 44 per cent slump in profits for the July – December half of the financial year.

The retail market is being challenged with consumer confidence down across the board, but in the electrical sector retailers are also being hit by significant price deflation. While the wholesale prices paid by the retailers were also lower, other costs such as rent, utilities and staff wages were all either steady or rising, resulting in a rapid erosion of earnings margins for many retailers. Philippa Kelly,Executive Director of Bulky Goods Retailers Association

While some blame the downturn in consumer discretionary spending to the European Crisis, others talk up business as the responsible thing to do but most just look squarely at the mad government in Canberra and do not have to wonder what happened to consumer and investor confidence over such a long period.

The collapse of Retravision is the latest in a string of high-profile failures in the retail sector over the past 18 months, with bookstores Borders and Angus & Robertson, and clothing groups such as Fletcher Jones, Colorado and Bettina Liano failing in an environment marked by intense competition as consumers cut spending. SMH

The pity of it all is that the Retravision cooperatives are some of the very few controlled by franchisees in Australia. I suppose there could be a return to cooperative business but electronic suppliers might be a little wary of the entire sector.

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About Ray Borradale

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Over forty years experience in Small Business and more than twenty-five years in franchising operations as a franchisee and employed by three franchisors, mostly in operations.

I have dedicated more than ten years and over 15,000 hours in the pursuit of quality franchising and exposing franchisor abuse of franchisees while advocating for the introduction of franchise relationship Law and the levelling of the dispute processes between bigger business and small business.


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