AVM placed in receivership

Press, 15 February 1986, Page 21

AVM placed in receivership

Audio, Video, Musical and Electronic Group, Ltd, (AVM), the Christ-church-based public unlisted electronics retail company, was placed In receivership yesterday. AVM’s managing director, Mr David Wells, said that a severe downturn in retail trading in consumer electronics was the main reason why the company had requested that receivers be appointed. The company, which has three shops in Christ-* church and one in Wellington, and employs about 16 people, was launched in March, 1984, by Mr Wells, the former managing director of Sedley Wells, Ltd. It has nearly 200 shareholders and a paid-up capital of $500,000. Mr Wells said a request had been made to the debenture holders, West-

pac Merchant Finance, Ltd, to appoint receivers. In a statement, AVM said that Messrs O. W. Pitcaithly and J. B. McAl.ister, of the Christchurch office of Deloitte, Haskins, and Sells, the chartered accountants, had been appointed receivers. “These steps were taken by the board in order to protect the best interests of all creditors and shareholders.

“It is understood by the board that the receivers will be assessing the position over the next few weeks, but that in the meantime, they intend to continue the company’s trading operations.”

Mr Wells said that the retail consumer electronics trade had shown a decline since September, but this had been accentuated recently. The retail side of the

business had been strongly profitable when the company had been launched, and the wholesale and manufacturing sides had caused trouble at the start.

The planning to go into manufacturing small electronic items stopped after the Labour Government was elected in 1984. This followed talk about free-ing-up imports, he said. The company had already spent a considerable amount looking at the feasibility of making the electronic items.

"Looking back, the timing of the launching of the company was atrocious. It was only three months before Muldoon called the snap election,” Mr Wells said.

Mr Wells has had a long history in the appliance retail industry, having been with Sedley Wells,

Ltd, the, Christchurch retail appliance chain established in 1939, for at least 10 years, the last five as the firm’s managing director.

Sedley Wells was taken over by Wilson Neill, Ltd,

in 1979, and Mr Wells later resigned after concluding an agreement that he would not become involved in the appliance business for two years. Given his experience in the retail appliance industry, Mr Wells said he had been asking himself a great deal recently why things had gone wrong in AVM. The market had changed a lot in the couple of years that he had been out of the retail trade. There were new products, particularly video cassette recorders and home computers, he said.

Even since AVM had started, the market had undergone further changes, with a move away from the “comer grocer shop” in electrical appliance retailing to “large supermarkets.”