By Patrick Avenell
The failures of Retravision Northern (RVN) and Western (RVW) to negotiate a slow transition from central accounting to direct accounting hastened the demise of individual members, internal company documents show.
In the Retravision Northern annual report for the 2011/12 Financial Year, obtained by Current.com.au, then acting chairman Anthony Tham wrote that the two Retravision companies sought to delay the transfer to individual accounts, as demanded by credit insurers.
“The almost immediate withdrawal of support from the credit insurers saw many suppliers wind back credit terms and limits to unworkable levels, forcing RVN and RVW to close down their respective central accounting functions,” Tham wrote.
“The requirement to close down central accounting required that stores now needed to establish direct accounts with suppliers as quickly as possible.
“The original intentions were for RVN to conduct an orderly wind down of the central accounting function over several months, giving dealers sufficient time to establish direct accounts, whilst still being able to order stock through central accounting ahead of direct accounts being opened. Unfortunately, the lack of support for this proposal by many of the credit insurers meant this was not possible.”
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Upon the withdrawal of credit insurance support for Retravision’s various central accounting facilities, leading vendors Samsung, Sony, Electrolux and Whirlpool placed the buying cooperative ‘on hold’. This drastically reduced the ability of individual members to trade, as these four companies supply some of the most popular brands and products in the market.
As a result of this trading limbo, members began flooding Betta Stores Retail and Bi-Rite Electrical, both Narta members, seeking refuge. Original reports from Retravision members indicated Narta had set a minimum turnover benchmark of around $3 million per year. Current.com.au understands that this was then revised up to $5 million.
Ian Taylor, of Taylor’s Electrical, was one of the Retravision Northern members accepted by Betta Stores Retail. Unfortunately, it was too late to save his Cessnock store.
“When we came across to Betta, we worked out that we weren’t on the best price with Retravision, so we were sort of out of the ball park,” he said.
“I don’t think we were on the best pricing system with Retravision through the suppliers, perhaps because of NSW going under and the suppliers being wary of Retravision — which turned out to be just.”