Adelaide franchise store Worldwide Online Flinders St which was bought for a record $1m in March 2012 is in liquidation.
Employees Jonathan Ban and Graeme Mattner bought the Adelaide CBD business from Chris and Jan Donovan, but only two and a half years later their big dreams are over.
Liquidators at Macks Advisory say it is too early to tell how much Rielstein Pty Ltd, Ban and Mattner’s holding company, owes. Already Fuji Xerox has taken back the financed kit and the remaining office equipment will be sold at auction in the next two weeks.
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When asked what sent the business into administration, Macks would only say “a problem occurred”.
Sources close to the company say the problem was losing a $2.2m Tafe SA contract to Reflex Printing last August. The owners expected the contract would be renewed but it was instead put up for open tender.
The sources say the franchise made several big equipment investments, mostly from Fuji Xerox, to service the supposedly 20 million black and white and two million colour prints contract, under the assumption that it would continue.
While they attempted to downsize to keep the business going over the next year, the high fixed costs of both the equipment leases and the huge vendor finance on the business purchase eventually killed them.
The sources say SA Government contracts were crucial to the business and were a significant reason for the high sale price.
When contacted, a despondent Ban directed inquiries to Worldwide managing director Rob Dallimore, who has not responded to repeated requests for comment.
Ban told ProPrint earlier this year that the business was working on a five year plan but it had been harder than they thought.
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Minutes of an August 8 creditors meeting indicate the directors chose to voluntarily wind up the business ‘in view of its inability to continue in business by reason of its liabilities.’
It is not known what Worldwide plans for the business, whether corporate will take it over and try to re-franchise it as Kwik Kopy plans to do with two Melbourne stores whose franchisee collapsed in March, or close it down.
Liquidators say intellectual property assets have been moved to Worldwide Northwood, where customers are now being directed, and are unlikely to be up for sale, and that Worldwide was aggressive about holding onto client records and contacts. Sources say the Flinders St facility has recently been cleared out.
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