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OPINION: Why The Lifestyle Store Really Failed & Why Its A Lesson For The CI & AV Industry

The latest creditors report into the multimillion-dollar collapse of the Sydney based Lifestyle Store, appears to be more about an administrator Company spruiking $650 an hour fees to continue an investigation, with no outline of the real reason the store went belly up other than some bleating claims of Vinod David who is still convinced it was not his fault the business failed with questions raised as to the disappearance or lack of availability of current accounting records.

Even the insurance Companies involved in the collapse have walked away from the directors of the business.

The answer is simple Vinod David and John Kranatis (seen above) the key executives in the business were hopeless former bankrupts, with a seriously questionable track record, who have again taken down people who put their faith in them without any regard to the consequences of their actions.

Vinod Dacid CEO Of The Lifestyle Store

As for the 16.7 hours of investigations by the administrators Fort Restructuring and a bill to date of $118,934 dollars all creditors have is what was already known about the business that was being run by two people who should never be allowed near a business again and that’s down to the Australian Securities & Investment Commission.

All the administrators had to do was go back to 2019 when executives in the custom install and audio industry bailed out the pair by loaning them money to pay out previous debts, including a $2M dollar tax liability.

Greed played a role because all suppliers wanted to do was to have the Lifestyle Store as a client so they could continue selling them stock, this bolstered their NSW revenues in a State that struggles up against Victoria and Queensland when it came to AV and audio sales.

Back in 2020 the really smart suppliers moved to cut off credit to the pair with the business resorting to using credit cards to buy stock and this should have sent alarm bells ringing.

So, what do suppliers do, they piled into the store to fund a total makeover of the store in North Parramatta and yes it looked good, but what they were investing in was a business that showed early signs of a cancer that would eventually lead to where the business is today, dead in the water.

At one stage Paul Riachi from Indi Imports sent a truck to Sydney to collect his stock of Loewe TV’s and sound gear because he had not been paid.

Even before Danny Assagby, who Vinod David and John Kranatis are trying to blame for the demise of the Lifestyle store came on the scene the LSS business was in trouble.

Despite this in 2022 Vinod David and Kranatis, who despite working in a struggling AV and audio operation, came up with the ill-fated notion of rolling out another business, Theatre At Home which is also in administration with debts in the millions and over 800 customers out of pocket.

At this stage they not only owed the tax office and suppliers money, the liabilities of the LSS business as of June 2021 already up to $8.395 million.

At this point Danny Assagby entered the fray, no cleanskin Assagby the CEO of Hudson Homes, and Eqiti Finance had himself sailed close to the wind in previous business deals stumped up $5M at 22% interest to the pair who then went on a manic expansion program with the opening of 7 stores across Australia.

In June 2022 when Assagby handed over the money for Theatre At Home the liabilities of the Lifestyle Store had risen to $12.754 million, with Assagby claiming that the books he saw, did not reveal the extent of the debt in the related business.

After burning through the $5M they went cap in hand to anyone they could to borrow money even at 80% interest.

In late September 2023 and after giving up on running a set of books for the business, which was most probably because the business was most probably trading while insolvent Vinod David went shopping for even more debt.

At the time Danny Assagby did what anyone owed $5M would have done he went looking for assets to secure against the money that Vinod David and John Kranatis had wasted on their ill thought out Theatre At Home idea.

Instead of one or two display store the pair went the full monty, 7 stores, staff and of course luxury cars and overseas trips.

As the business was crumbling Assagby went looking for a buyer or an investor to bail him out by buying out his share in the operation.

When this failed Assagby moved to secure the Lifestyle Store, and the remaining assets against the Theatre At Home debt.

The documents I have seen are pretty clear with Vinod David signing over the assets of the Lifestyle Store to the Assagby controlled Company Danwa.

Vinod David claims Danwa subsequently commenced removing Life Style Store’s assets on April 10 2024, including new and display stock from the showroom and warehouse and moved them to their own location.

The stock which is today still not audited was handed over to Nicols + Brien, who Danwa appointed as administrators to ROQO and Theatre at Home on 15 April 2024.

Vinod David claims that whilst Danwa and the administrators were still in the process of removing items, the landlord locked all parties out of the North Parramatta showroom on 26 April 2024 when the rental for the site reached 4 weeks past due and terminated the lease of the site.

The directors of the Lifestyle store claim that as Danwa had taken control of all bank accounts and restricted our his to trade they were unable to pay the rent and the landlord was not willing to provide an extension.

His view is simplistic to the extreme, the sole reason the business failed was because Assagby moved on a business that was hopelessly in debt, unable to get credit and was most probably trading while insolvent.

What Assagby did was bring to an end a soap saga run by two liars who knew how to spin a yarn, not only to finance Companies but also to their own staff some who they had convinced to use their own credit cards to buy goods, as well as the hundreds of customers who have lost millions in deposits for goods that were not delivered across both entities.

In their ROCAP report Vinod David, the director of the Lifestyle Store claimed that liabilities of the business were $7.162M, the administrators begged to differ claiming that the Net position of the Company was a $23.68 million liability.

Take out what is owed to Assagby and the fact that most suppliers don’t believe that the business which claimed to have 85 staff was trading at a 35% margin and you still have a business that was not fit for purpose and was doomed to failure.

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