News

11 Oct 2012

Allans Billy Hyde – why close the stores?

Something is not right with the Allans Billy Hyde (Australian Music Group) liquidation, according to the next largest retailer Con Gallin. Mr Gallin is the Managing Director of Australian Musical Imports (AMI) and Gallin’s Musician’s Pro Shop retail stores.

He made his fondest dollar importing Gibson guitars.

Mr Gallin asserts that he has twice placed a perfectly realistic offer on the table for some of the 26 music stores, even offering to honour the gift cards that the liquidator cancelled. “Our offer for AMG was a very attractive one” Gallin said.

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But receivers Ferrier Hodgson continued to liquidate the group’s stock in a run-out sale that is still under way. Stores in Willoughby and Queensland are closed or about to close, according to posts on cxmagblog.com

When CX reported the sale of Dick Smith stores less than a fortnight ago, pointing to the poor value this precedent set for Allans Billy Hyde, we had aggressive and anonymous posts along the lines we were both wrong and badly informed. Despite stores with ‘last days’ plastered on the window, we were accused of inaccurate and shoddy journalism for saying stores would close.

The failure of AMG cost the National Australia Bank $48 million, according to the Sydney Morning Herald, here.

CX reported the possible collapse of the group in February, after a story rumoured to have leaked from the National Australia Bank appeared in the Financial Review.

The NAB, according to the rumour, sought to bring tension to the management. They achieved that, with a firm buying the bank debt, which was then $56 million, for a bargain $8 million.

However last week, Mr. Gallin confirmed 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. Those offers were rejected outright.

Mr. Gallin said that while he was disappointed, he remains confident about the industry with AMI recently being granted bank approval to expand the business with additional stores and increased staff.

“Our offer for AMG was a very attractive one” Gallin said, even offering to honor the gift vouchers.

“Gallin’s and AMI are performing well because its staff and management understand that it’s all about the music and musicians – beginners or professionals” he added.

“We are in the business of serving people’s love for making music, that’s the key. People invented musical instruments that produce a wide variety of tone and resonance. Music is a passion and like art and literature, it somehow inspires us and working in the retail side of music has a similar effect. If you don’t get that, then you will not be in tune with your customers. You certainly won’t be able to run a $100M business.”

How about a vote of sympathy for the staff at Allans Billy Hyde, who have been truly hung out to dry – first by the suits who botched the merger of Allans with Hydes, then by the NAB which (if the rumours are true) started a media spiral against the firm, and finally by Ferrier Hodgson who signaled they had no intention of trading the stores by unilaterally cancelling gift certificates on day one. Questions need to be asked by creditors, whose interests are supposedly represented by Ferrier Hodgson.

 

 

 

 

 

 

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