Australia's EzyDVD placed in receivership
Retailer's trading position under assessmentBRISBANE, Australia -- Specialist Australian DVD and entertainment retailer EzyDVD has been placed in receivership after floundering under a pile of debt. The move is roughly equivalent to Chapter 11 bankruptcy protection.
The Adelaide, South Australia-based company generated estimated annual revenue of about AUS$95 million ($67 million) and has 58 outlets across Australia, of which 32 are franchised outlets. David Kidman, partner in Australian accountancy firm Ferrier Hodgson, has been appointed joint-receiver of the remaining 26 company-owned stores, which employ an estimated total in excess of 200 staff.
Kidman said all EzyDVD stores would operate normally while an urgent assessment of the company's trading position was undertaken and the business offered for sale. "We are keen to keep the business operating in this peak buying period," he said.
He said the retailer's financial problems appeared to grow from its significant debt burden, substantial operating losses incurred in 2007 and 2008 and a trading slowdown in recent months.
The retailer employs 70 full-time staff members in its main warehouse and distribution facility, and in management roles with its company-owned stores. The firm hires roughly 150 casual employees nationwide.
Jim Zavos, who founded EzyDVD back in 1999, was gearing up the company to compete in the online film distribution age. In September 2007, the firm agreed to buy the assets of debt-laden Internet video provider Reeltime. The rebranded EzyDownload service was pitched as a "one-stop, online entertainment portal offering legal download-to-rent or download-to-own options," but its September launch was put on ice due to the global financial crisis.
Entertainment retailer Brazin Limited had a 50% share of EzyDVD, which it bought in 2003 for $1.5 million Australian ($1 million). Zavos has reportedly since repurchased the stake.
In other news from Australia, police Wednesday arrested a repeat offender who is alleged to have sold thousands of pirated CDs and DVDs at the Prestons Grand Bazaar markets in Sydney. The man is facing similar charges for a raid conducted in April.
The Music Industry Piracy Investigations and the Australian Federation Against Copyright Theft helped New South Wales police in the investigation.