By James Wells
MELBOURNE: Funtastic has sold its electrical brands Pirahna, Dome, Vibes, Jolie and Avita to another Australian company, HE Group for $1.0 million.
HE Group, owned by Harry Elyahou, is a private Australian-based company involved in electrical hardgoods wholesaling.
The decision to sell its electrical brands was made by the Funtastic Board after a strategic and operational review was carried out on the business unit. The transaction does not include Funtastic’s licensed children’s electronics business, which will be retained.
HE Group has also renegotiated the licensing rights to the Revlon brand, previously acquired by Funtastic.
According to a statement, the transaction has been structured as sale of trademarks, intellectual property and existing inventories to HEG and will be close to net tangible assets which is approximately $1.0 million.
The decision to leave the category was made less than two weeks before managing director David Hendy stepped down from his position to become executive director. Shares in the company slumped 15 per cent after Hendy’s decision to resign.
Prior to his departure, Hendy told shareholders the company in August 2005 the company was experiencing “weakness in demand for its electrical products as major retailers pursue the direct importation of generic home brand products”.
Electrical products represented five per cent of the company’s $350 million turnover or approximately $17 million.