Retra Southern to post FY08 loss, McKnights sale primary cause

By Chris Nicholls

MELBOURNE: Retravision Southern chief executive Tim Cockayne has confirmed rumours the company will post a loss this financial year, but put much of it down to a one-off cost relative to the company stores, undertaken as part of a larger restructure.

Speaking exclusively to Current.com.au, Cockayne said much of the loss, the precise amount of which was not disclosed, came from lowering the former McKnights stores’ sale prices as the company moved away from a company store model as quickly as possible.

“Whilst there will be a loss for this year, it is very much relative to the company stores [the former McKnight’s Retravision stores] and a good proportion of that is in goodwill write downs,” said Cockayne.

“And that part of it is very much tactical, in that we’ve set new prices for these stores to ensure that we can sell them very quickly and maintain them as Retravision stores, because we don’t want to be in the company store business over the long term.”

It appears the sale was part of a larger strategy to strip out costs as the current economic downturn began to bite.

“Obviously I’m looking at that [the economic conditions] and stripping costs out wherever it’s achievable, without in any way changing the service level,” Cockayne said.

The chief executive said “everyone” had been affected by the recent economic slowdown, and admitted the consumer electronics industry “get affected first”.

“You’ve got two decisions to make in a time like this. One is you can be very proactive and do things now, or you can wait twelve months and hope that you get there – and I don’t mean from us, I mean from anybody in this industry. And we’re in a position where we’re going to take costs out now, and give ourselves a nice, lean model going forward.”

“This is the case, and we’ve put a lot of things in place to fix that straight away," said Cockayne.

Cockayne said the restructure would lead to “a model that will be more profitable than past years”.

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