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Allphones enters administration as investors’ cash dries up

Allphones enters administration as investors’ cash dries up

Eighteen of the retailer's stores around the country will close due to “insufficient funding"

Mobile phone retailer, Allphones, has gone into voluntary administration, with at least 18 its stores around the country closing up shop due to “insufficient funding”, resulting in more than 60 redundancies.

On February6, Phil Carter, Daniel Walley, and Mark Robinson of PPB Advisory were appointed as voluntary administrators of the nine Australian businesses comprising the Allphones Group.

The independent mobile phone retailer operates 84 stores, and employs about 440 people across the country. Of these stores, 25 are company owned, seven are franchises, and the rest are licensed and operated on behalf of other parties.

“The Allphones Group was acquired in May 2016 by a Canadian shareholder with the ambition to undertake a turnaround of the business,” PPB Advisory said in a statement. “Despite financial support from the shareholder and significant efforts to deliver a successful turnaround, the shareholders are unable to continue funding the group’s losses.

“The Board of each entity has been left with no option other than to place each entity in the Allphones Group into Voluntary Administration this morning [February 6],” the administrator said.

Based on an initial review by the voluntary administrators, 18 of the company-owned Allphones-branded stores will be closed from February 6 due to "insufficient funding" to keep the stores trading during a proposed sales process.

As a result, 69 employees have been made redundant.

According to the administrator, discussions are underway with "interested parties" who may be able to take over the operation of the remainder of the store network, which is running on a business-as-usual basis.

“We are today undertaking an urgent review of Allphone’s business in order to stabilise the current operations and store network, and ensure that the employees impacted by the store closures today are fully supported,” Phil Carter of PPB Advisory said.

“Our immediate priority is to work with Allphones’ staff, franchisees, licensees and other key stakeholders to allow the remaining store network to continue trading on a business as usual basis," he said.

The Allphones Group's parent company is the Australasian Mobile Telecommunications Group (AMT Group), which claims to be the largest independent mobile phone retail group in Australia and The Philippines.

In addition to the Allphones brand, AMT Group also owns and manages a number of other businesses, including ARMS, All Distribution, Allphones Mobile, Allphones Broadband, and My Number.

In 2012, AMT Group was purchased by GLENTEL, which is headquarters Canada, and operates four separate divisions, including Retail Canada, Retail U.S., Retail Australia, and Business Services.

The administration follows the announcement of a $25 million "impairment" by Allphones Group's parent company in 2014, after it lost a contract that would have seen it operate 45 Virgin Mobile-branded retail outlets across the country, according to the ABC.

The write-off came on the heels of a move by Virgin Mobile Australia's parent company, Optus, to withdraw its products from Allphones stores, the ABC reported.

The Allphones Group businesses that have gone into administration include All Distribution, Allphones Retail, Allventures, AMT Group, My Saver Telecommunications, Australian Retail Management Services, and Allretail.

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