EXCLUSIVE:Teac OZ Faces Uncertain Future As Losses Mount, Senior Exec’s Retrenched
Insiders have told ChannelNews that they doubt that the Company will survive in Australia and that the Teac brand which is now owned by Gibson Brands could be taken over by a distributor in Australia.
Insiders at TTA Holdings in Singapore have told ChannelNews that a decision on the future of Teac Australia will be made by the end of 2014.
Recently Teac Australia Product and Marketing Manager Peter Burnham was retrenched along with all Teac State Managers. Also retrenched was Jason Carrick National Sales Manager, along with Michael Hoang National Support Manager, ChannelNews has been told that the Companies receptionist has been retrenched this week.
ChannelNews understands that excess stock and a slowdown in orders from the Australian subsidiary contributed to TTA Holdings losses.
The Company said that a slow response by its retailers towards new Teac products introduced by the Company had contributed to the decision to cut costs at the Australian operation.
Another contributor was a move by Teac to incentivise mass retailers in an effort to shift excessive inventory at Australian retailers following poor sales of Teac TV’s and portable audio products during the first half of 2014.
Company executives in Singapore said that poor acceptance of new Teac products and poor sales of Teac products in retail stores during late 2013 and early 2014 had, resulted in a significant impact on the Company’s performance during the four months ended 31 July.
In a written statement TTA Holdings said that they will continue to focus on its efforts on progressively cutting overhead costs a move that could result in further retrenchments in Australia.
Another Company that is facing similar problems is Palsonic. ChannelNews has been told by mass retailers that the brand that could replace both Palsonic and Teac TV’s in the budget category is Hitachi who will shortly release a new range of TV’s in Australia.
In Australia Teac has had a chequered history back in 2004 the Company was placed into administration after former owner Gavin Muir racked up a mountain of debt.
Part owner and managing director of Teac Australia Muir was ousted from the Company and from a $123 million apartment investment he had in Melbourne.
Muir established Teac Australia in 1978 and was a 50 per cent owner; the other half was owned by Teac Japan. The electronics company had a turnover of $170 million and about 100 staff.
Muir even refurbished the historic former Royal Mint building in William Street as Teac’s main headquarters after visiting the Louvre and Champs Elysees in Paris.
But as consumers switched to other brands and as costs of running what had become a problem Company Teac Australia collapsed owing millions of dollars in debt.
Back in 2008 Kenneth Evans, the former chief financial officer and director of Teac Australia Pty Ltd, was sentenced to two years and a half years imprisonment suspended for three years following an investigation by ASIC.
Evans pleaded guilty on 23 August 2007 to five contraventions of the Corporations Act, including two counts of failing to act in good faith in the best interests of Teac Australia, one count of dishonestly using his position as a director of Teac Australia, one count of falsifying company books and one count of providing false or misleading information to the auditor of Teac Australia.
The Court was told that Evans, dishonestly failed to exercise his powers as a director, in Teac Australia’s best interests by failing to register securitisation documents and enforce Teac Australia’s rights in relation to a loan provided to a private company of Teac Australia’s Chief Executive Officer and principal, Gavin Muir.
He was also accused of dishonestly using his position as a director of Teac Australia to reduce the amount outstanding on the loan on the eve of the appointment of administrators to Teac Australia; and that he gave false or misleading information to the auditors over the value of Teac Australia’s debtors.
Mr Evans attributed responsibility for his actions to Mr Muir claiming that he was merely a senior employee carrying out the instructions of the company’s principal.