Struggling IPTV aspirant and DVD retailer EzyDVD has been placed into receivership with Ferrier Hodgson brought in as appointed manager and receiver this week.
Ferrier Hodgson partner David Kidman confirmed that the company had been struggling through a retail sales slump, which was compounded by a significant debt burden and substantial operating losses in 2007 and 2008.
EzyDVD founder Jim Zavos started the company in 1999 building it to an estimated $100 million turnover business, claiming 25% retail sales growth for the year ending June 2008. The retailer had been re-positioning itself over the last 18 months to enter the nascent online movie download market, following the acquisition of the assets of failed IPTV operator Reeltime. The movie download service, branded EzyDownload, was slated to launch in September but was placed on hold due to a downturn in retail sales. Late last month Zavos said the he was committed to resurrecting the project in the new year when the economy picked up and was not planning on relinquishing the IPTV infrastructure. The collapse of the EzyDownload plans coincided with the Federal Court action against Perth ISP iiNet, which was accused by the film majors of allowing customers to break copyright restrictions by using Bit Torrent for illegal movie downloads.
Zavos was pitching the EzyDownload service as a direct challenger to BigPond and was planning to partner with ISPs around the country to promote an uncapped download service.
The Adelaide-based company has 58 retail outlets nationally which includes 26 company-owned stores and 32 franchised outlets. The franchised outlets are not affected at his stage.
Hodgson advised that all EzyDVD stores would operate normally while an 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."
Meanwhile, the management team behind online movie retailer Quickflix has snapped up the 19.9% stake in the ASX listed company which was once owned by Destra.
"We are big believers in Quickflix and it’s good to clear away the overhang in our stock. The company has done the hard yards and we think 2009 is going to be a strong year for us as more consumers look for entertainment at home," said Quickflix executive director Stephen Lansford.
The parcel of 16,265, 293 shares which was placed in the hands of receivers Korda Mentha last month, was acquired by Quickflix management for $178,918. Prior to Destra’s ownership, the stake was owned by Lachlan Murdoch’s diversified investment vehicle Illyria, Murdoch divested the stake worth about $1.20 million in June 2007 in exchange for 4.17 million new shares in Destra . At the time of the transaction Destra had a market capitalisation of around $71 million with a share price sitting at 32.5 cents while Quickflix had a market capitalisation of $10 million with shares at 19.5 cents. Shares in Quickflix closed at 1.6 cents on the news this week.
