Entering a new market and rapidly slashing prices to unsustainable levels has been blamed for the current financial troubles of Melbourne trade finisher, Protectaprint.
Two established trade finishing service providers in Melbourne – TLC Digital and Avon Graphics – both say Protectaprint radically reduced pricing with the strategy not serving the business well in the long term.
Protectaprint began offering trade finishing and laminating services in Melbourne in 2017 when brothers Richard and Steven Wilkinson purchased the Victorian branch of Allkotes and rebranded the business.
The brothers had previously operated Protectaprint in South Australia but had sold out to Opus Group’s McPhersons in 2015 but decided to get back in the game with the 2017 purchase of the Allkotes division.
The business hit some financial troubles in 2019 and ended the year being put into liquidation with a special resolution passed on January 13 to wind it up with it now in liquidation.
TLC Digital managing director Barry Webster (pictured above left) said pricing was the main problem.
“The demise has really come from silly pricing. They had the equipment, they had the staff, it just comes down to pricing,” Webster told Sprinter.
“They had crazy price structures and it was unsustainable.
“When you’ve got that sort of pricing you’ve either got to stay really flat out at every moment and you cannot have any mistakes. If you make mistakes and have to pay for the reprint then there is not much money available to pay that with.
“The pricing dropped as soon as they got in. It seems their strategy was we will go to this level, we know it is unsustainable but if we can outlast the competition then we can put our prices up to where they should be.
Avon Graphics managing director Tate Hone (pictured above right) said he feels for the staff at Protectaprint but is hoping a stabilisation in the sector will now occur.
“I feel for the staff and everyone involved. It’s a long-standing company under the old name of Allkotes with a lot of respect and it’s a pity that it has ended up this way,” Hone told Sprinter.
“As soon as they entered the Victorian market they adjusted the pricing significantly down across the board on all processes and we could never make sense out of it. It makes it very tough. For a lot of printers, prices are very important especially in this day and age in this market so we do try to help wherever possible but to compete with that on a daily basis by all accounts is not possible.”
Webster and Hone said both had been taking on new business from Protectaprint with some staff coming over as well.
Webster added TLC has the capacity to accommodate and assist any Protectaprint clients at its new factory in Braeside.
“We have invested heavily in the industry and are more than able to pick up extra work out there,” Webster said.
Cor Cordis liquidator Barry Wright has told Sprinter despite Protectaprint being in liquidation it is continuing to trade “business as usual” under the liquidators’ authority as a new buyer for the business or assets is sought.
“It is business as usual for Protectaprint Melbourne, as trading operations continue under the liquidators’ authority at present,” Wight said.
“In conjunction with the liquidators overseeing ongoing trading operations, we are continuing to explore whether there are any parties interested in acquiring the company’s business and / or assets.
“We thank the ongoing support of both customers and suppliers to date. We encourage customers to continue placing their orders in support of the business at this time.
“Further updates regarding the sale of the company’s business and / or assets will be provided to creditors in due course.”
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