Leading Edge outlines final proposal

By James Wells

SYDNEY: Leading Edge has outlined its latest offer to BSL members, 24 hours after its direct competitor for the BSL franchise business, Everard Johnson, drove to the School Street head office of the retail group to start contractual negotiations with the receiver of BSL – Phil Carter.

In a document obtained by Current.com.au, Lane said he is continuing to negotiate with the receiver.

"We have submitted a proposal with a contract for sale outlining our terms which we believe to be fair and realistic. The receiver is clearly trying to obtain the best price.

"The problem we have is that the higher the price the greater the risk and without knowing the precise number of members and purchasing power, I can not easliy model the business and therefore know the right price. One of the biggest risks for us is the high cost of maintining the IT system until a more cost effective solution is found.

"Whilst we received significant response from members last week the world is changing.

"As I said yesterday, I firmly believe that the best solution would be a partnership between the consortium and Leading Edge, however in the absence of this eventuality I ask you to advise us whether you would support a Leading Edge initiative.

In the document, Lane outlined Leading Edge proposal:

* 1.5-2.5 per cent (maximum) of supplier rebates to the group to suport operating costs and a marhin, then precise amount wil be dependant on the toatl puchasing volume achieved, the higher the volume the lower the % needed. All other rebates paid to members, at the time of appointment the rebates were at about seven per cent.

* Each member will deride individual catalogue volume and purchase catalogues at subsidised price of 8c per catalogue (user pays)

*$500 member fee per month

*$600 per month for IT support in the short term until the IT syustem is rationalised. When this is donw the charge will be reviewed

*We will centrally bill accounts for those members and suppliers who need it, Fisher & Paykel etc

*We do have the working capitcal to make this happen

*No up front bond

If Leading Edge is successful in purchasing the brand and IT system will you join the group?

Please sign this document name your store location and FAX back. Your respons will be confidential to Leading Edge.

Fax to Kieith Lane 02 82083259


Pending your prompt response (today close of business) we will be in a position to finalise our negotiation

Leave a Reply

Your email address will not be published. Required fields are marked *