Peter Halkett, chief executive of British electrical chain Powerhouse, yesterday told how grim the business was when he arrived from New Zealand to take charge of its turnaround.
Pacific Retail Group, controlled by expat New Zealander Eric Watson, bought the bust retailer from receivers a year ago and Halkett told the company’s annual meeting how he arrived to face suppliers lined up waiting to repossess their goods.
Halkett – being beamed in from night-time in England – said: “We have owned the business for one year and 12 days … but who’s counting?
“Suppliers were trying to repossess £16 million ($43 million) of unpaid stock, media were chasing me down regarding undelivered customer goods for more than 16,000 people, phones were about to be cut off and we had no bank accounts.”
His comments at Powerhouse parent Pacific Retail’s annual meeting revealed the extent of the issues the company bought into with its first dip into a market outside New Zealand.
Halkett said Powerhouse, which reported a $46.4 million trading loss for the 2004 year, was three to six months behind schedule. The Powerhouse loss dragged Pacific Retail’s full year down to a $22.6 million loss.
Powerhouse was not on track to take advantage of last year’s critical Christmas trading period and “clearly the [loss] was worse than we had anticipated”.
However, Halkett argued that the case for the $47 million purchase of the 128-store chain was still solid.