Suppliers hit by Clive Peeters collapse

Electronics suppliers will be hit by the collapse of retailer Clive Peeters, with sources in the sector saying some suppliers could see sales fall by as much as 20% as a result of the collapse.

Clive Peeters is now in the hands of receivers after collapsing with $160 million in debt. It is expected the receiver will shut down unprofitable stores and try to sell the profitable ones, with Harvey Norman and JB Hi-Fi seen as the likely buyers.

While much of the attention has focussed on what will happen to customer orders placed with the chain, suppliers are also battling to come to terms with the collapse.

SmartCompany understands one supplier of kitchen appliances is now recasting its budgets and trying to find ways to plug a gap in its sales that could be as big as 20% of its total order book.

Ian McAlister, executive director of the Consumer Electronics Suppliers Association, says the association’s members will be hit by the collapse, especially some of the smaller players.

“Our members will certainly be affected by the Clive Peeters collapse. They had over 40 stores, and some of our companies will be frustrated by losing so much exposure into consumer electronics. We have suppliers providing whitegoods, brand goods, televisions and refrigerators, so these are big-ticket items.”

“The impact will hit the larger of our members, like LG and Samsung, but for a lot of other players like Shout and Daikin, there will also be an impact, along with companies like Electrolux, and whitegoods suppliers like Whirlpool. It also affects the competitive nature of the market.”

While McAlister said the move will open up some opportunities for others to enter the market, there are still questions remaining as to whether stock will be returned, or how customer orders will be fulfilled, if at all.

Those issues are now in the hands of the company’s receivers, PPB. The firm was contacted this morning, but a spokesperson said the company was unavailable for comment.

“I’m not too familiar with how Clive Peeters operates in terms of the details of their suppliers. Also, whether or not stock will be returned, that’s up to the receivers. I guess we’re still waiting to see what will happen there.”

“The unfortunate implication here is on the consumers. They’re getting a bad taste in their mouth, as they would have had during the Kleenmaid collapse. This has happened before.”

Whitegoods retailer Kleenmaid collapsed last year due to financial difficulties. While the company’s devices are back on sale after being acquired by equity firm Compass Capital Partners, a number of franchisees said last year they were frustrated by the confusion surrounding outstanding stock purchases.

Danny Hamilton, chief executive of CCP, says Kleenmaid won’t be affected by the Clive Peeters collapse, but noted the incident was a sad development for the industry.

“It was a good retail company, and certainly when I was dealing with them, they were very proactive. It’s a very sad development for the industry.”

One industry source, who wished to remain anonymous, said the Clive Peeters collapse may affect smaller retailers, but none are at risk of falling over. “Too many of them have moved around to different suppliers, but some smaller ones may feel an impact.”