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Buzzle takes $20m bite out of Apple.

Wednesday, 09 May 2001
By Print 21 Online Article

Few of the individual owners of the 30 stores that came together last year to form computer retail and service consortium Buzzle will be able to retain their businesses. Many are resigned to walking away from formerly profitable stores in the wake of the crash, according to industry sources.

Since principle creditor Apple placed the company in receivership last month, six of the stores have closed as administrators KPMG struggles to find a buyer for all or part of the beleaguered group. The casualties are the Buzzle stores in Heidelberg and La Trobe in Victoria, Chermside in Brisbane, McMahons Point, Burwood and Capital Square in Sydney.

The group owes Apple a reported $20 million and represents one third of the company’s distribution network in Australia.

Some of the best-known Apple resellers submerged their identities in the ill-fated group, which this time last year was talking up its potential to be listed on the Stock Exchange. Choice Connections in Sydney, DesignWyse in Melbourne, GM Computers are but some of the major players that hitched their wagons to the Buzzle star.

According to a report in ITNews, Rob Kloester, of DesignWyse, having reached an agreement with Apple, intends to take back control of his high-profile business and continue trading under its old name.

Apple was cautious in its response to questions only saying that it has survived the loss of retail outlets before and expressing confidence that the Buzzle collapse will not severely dent performance targets. Apple claims an 85 per cent market share in the graphic arts industry.

Reasons for the collapse are varied but most agree that internal communications, inadequate accounting procedures and management failures contributed to the problem. All the stores were supposedly viable concerns prior to the amalgamation.

Most of the Buzzle managers and shareholders were guarded in their responses to questions. KPMG would make no comment.

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