Following the shock news that Australia’s largest chain of music retailers, Allans Billy Hyde, was going into receivership, causing a collapse which saw hundreds losing their jobs amidst debts of nearly $40 million, it now looks like the final nail has been driven into the coffin of the former music retailer.
James Stewart and Brendan Richards, from Ferrier Hodgson, were appointed as administrators by Revere Capital in August and immediately placed the retailer in receivership; and today have released a press statement that clearly spells out the final word for Allans Billy Hyde stating:
The Receivers and Managers of Australia’s largest independent music retailer, Australian Music Group Holdings Pty Ltd (AMG), trading as Allans Billy Hyde, have announced that efforts to sell the business have failed and it will be closed down.
The 513 remaining AMG employees will be made redundant over the next few weeks as the closure process comes to an end. Previously during the receivership, 80 employees had already been made redundant. A number of other employees resigned during this period.
Additionally all remaining stores “are now in hard closedown mode, with a stock sell-out sale well underway,” which means that come November, Allans Billy Hyde will sadly, officially be a thing of the past.
“The loss of jobs is disappointing,” said the receiver Mr. Brendan Richard “but we exhausted all avenues and there is no other way forward for this business.”
In the face of their impending doom, Allans Billy Hyde sought new owners to purchase the business, including Bain Capital; the private equity firm founded by US Republican presidential candidate Mitt Romney, who were reportedly circling the buy-out at the eleventh hour.[do action=”pullquote-2″]The loss of jobs is disappointing… but we exhausted all avenues and there is no other way forward for this business[/do]
Another “very attractive” offer to purchase the ailing business was made by retail competitor, Gallin’s Musician’s Pro Stores, according to owner Con Gallin, Managing Director of Australian Musical Imports (AMI).
As previously reported, Gallin states that AMI “had tabled a number of genuine and competitive offers to the receiver, Ferrier Hodgson, in an attempt to not only keep the Allans Music & Billy Hyde stores open but to maintain its dedicated staff,” as well as honouring pre-purchased gift vouchers that Allans Billy Hyde refused to in its sorry financial state.
“Those offers were rejected outright,” said Gallin, while criticising the chain’s owners and management, saying they “lacked music retail expertise and as a result lost large amounts of money. They couldn’t adjust the company expenses to meet reality and they are not inspiring entrepreneurs. This is the game of Monopoly out of control and the economy is not to blame.”
According to The Sydney Morning Herald, NAB will take a $48 million hit from the collapse of the instrument retailer and its liquidation of assets, following debts that reached nearly $56 million at its highest point in March. Additionally, Channel News estimates that secured creditors are owed around $13.5 million, while employee entitlements are estimated at $3 million.
Allans Billy Hydes employees – comprising more than 600 employees across nearly thirty nation-wide stores – were thanked for their dedication by Mr. Richards, the receiver: “These people have served music lovers and been a key part of the Australian music industry for generations. It is a sad day for live music in this country,” he said.
Mr Richards said the Receivers will work with the Administrator to enable all employees to make claims for their entitlements through the Government Entitlements and Redundancy Scheme (GEERS) as quickly as possible.
The news of Allans Billy Hyde is particularly poignant given that it comes only two years after the two businesses combined forces in July 2010 to face down financial struggles to begin with.