By James Wells
BRISBANE: Betta Stores Limited (BSL) has announced it will be ceasing its central accounting facility this month, after describing this facility as “no longer desirable for retailers or for BSL”.
In a letter to suppliers last week obtained by current.com.au, BSL national buyer – portable appliances and floorcare, Tracey Cosgrove, confirmed the company will cease central accounting effective from the close of business on 30 April.
“Betta Stores Ltd have in the past offered a central accounting facility allowing group retailers to purchase products from your organisation and charge to BSL Finance,” Cosgrove said in the letter.
“It has become evident that this facility is no longer desirable for retailers or BSL and as a result, BSL will cease central accounting.”
“The administration of this function has become difficult and cumbersome for retailers, BSL and the suppliers currently involved in the central accounting program.
“Simply, the facility when initiated was seen as a necessary service for retailers and suppliers to allow efficiencies and continuity of supply. The facts are, the industry has changed and the efficiencies are no longer there,” Cosgrove said.
Suppliers were told to contact all BSL retailers they were trading with via central accounting and establish a new long term trading account directly with the company.
“Our retailers will be asked to cancel all outstanding orders in the BSL central accounting system and reorder direct on and from 1 May 2006,” she said.
To capture any dormant accounts, Cosgrove asked suppliers to electronically forward a credit application form which will be posted to the BSL members intranet and accessed by BSL stores as required.
“I’m sure you will agree that this is the best option for all group retailers and I ask that you work with BSL Finance to ensure a smooth transition.”
Last week, BSL announced it had signed an agreement to sell the Retail Mortgage Services (RMS) interest free debtor book to consumer finance specialist, GE Money, for $8.5 million.
RMS was acquired by BSL in the purchase of South Australian retailer, AK Truscotts Investments, for $22.676 million on 1 December, 2004. RMS will continue to manage the debtors book on GE Money’s behalf, guaranteeing repayment as received.
BSL CEO Guy Houghton is in Adelaide at the moment and is expected to finalise the sale of the business tomorrow.
“The BSL board wants to focus on our core business and that is franchising. That’s what we do best. Do we need a consumer finance business located in South Australia? The answer is no. Providing consumer finance products is not a core service we need to supply when you have a business like GE Money who specialise in the field.
“Over the last few years, we have acquired a few businesses including a retail and finance business and the market was very different to what it is today. The board has decided that we do not need to be in that space by offering finance.
By offering finance, we are in effect going head to head with GE."
Another major announcement from BSL is expected by the end of the week.