It’s been a hard fought run to the top for Soundwave Festival boss AJ Maddah who has reportedly added another asset to his portfolio by buying the backline hiring company Allans Billy Hyde Stage Systems just weeks after the collapse of parent company Allans Billy Hyde.
According to The Music Network, Clementine Music, which is owned by Madjo Enterprises and controlled by Maddah, quietly made the purchase last week for an unspecified sum. The rental business was the only surviving arm of what was once Australia’s largest retailer before it collapsed owing more than $40 million to creditors and sacking its entire workforce.
The news of Maddah’s purchase also comes at an interesting time, as his fellow promoters around Australia have also been on a buying and merging spree over the last 12 months, most recently with the announcement of the newly-formed Virgin Live between Paul Dainty and Richard Branson, forged to promote The Rolling Stones’ 50th Anniversary shows.
The Dainty Group has also partnered with former Big Day Out promoter Vivian Lees to create Two Worlds Touring last September, while Lees’ former partner, Ken West sought solace in a new partnership with C3 Presents, the international company responsible for the likes of Lollapalooza and Austin City Limits, bringing their considerable promotional power to the Big Day Out 2013, which is set to sell out in a matter of weeks.
Both of which is following on from news that Michael Chugg and his Chugg Entertainment group recently announced alliances with Homebake 2012 as co-promoters, as well as a new deal with A&R Worldwide; while Splendour In The Grass promoters Jessica Ducrou and Paul Piticco recently bought into Falls Festival.
The purchase of Allans Billy Hyde Stage Systems however, which reportedly turns over nearly $2 million a year, won’t affect the shocking collapse of Allans Billy Hyde after going into receivership in September, which saw hundreds losing their jobs amidst debts of nearly $40 million.
In the face of their impending doom, Allans Billy Hyde sought new owners to purchase the business, including Bain Capital; the private equity firm founded by US Republican presidential candidate Mitt Romney, who were reportedly circling the buy-out at the eleventh hour.
Another “very attractive” offer to purchase the ailing business was made by retail competitor, Gallin’s Musician’s Pro Stores, according to owner Con Gallin, Managing Director of Australian Musical Imports (AMI).
As previously reported, Gallin states that AMI “had tabled a number of genuine and competitive offers to the receiver, Ferrier Hodgson, in an attempt to not only keep the Allans Music & Billy Hyde stores open but to maintain its dedicated staff,” as well as honouring pre-purchased gift vouchers that Allans Billy Hyde refused to in its sorry financial state.
“Those offers were rejected outright,” said Gallin, while criticising the chain’s owners and management, saying they “lacked music retail expertise and as a result lost large amounts of money. They couldn’t adjust the company expenses to meet reality and they are not inspiring entrepreneurs. This is the game of Monopoly out of control and the economy is not to blame.”
The rejection of the offers led receivers no choice but to liquidate the remaining assets of the company. “The loss of jobs is disappointing,” said the receiver Mr. Brendan Richard “but we exhausted all avenues and there is no other way forward for this business.”
According to The Sydney Morning Herald, NAB will take a $48 million hit from the collapse of the instrument retailer and its liquidation of assets, following debts that reached nearly $56 million at its highest point in March. Additionally, Channel News estimates that secured creditors are owed around $13.5 million, while employee entitlements are estimated at $3 million.
Allans Billy Hydes employees – comprising more than 600 employees across nearly thirty nation-wide stores – were thanked for their dedication by Mr. Richards, the receiver: “These people have served music lovers and been a key part of the Australian music industry for generations. It is a sad day for live music in this country,” he said.
Mr Richards said the Receivers would work with the Administrator to enable all employees to make claims for their entitlements through the Government Entitlements and Redundancy Scheme (GEERS) as quickly as possible.
