Company controlled by Sony Europe faces liquidation after shutting stores

Sat, Dec 31, 2011, 00:00

A COMPANY controlled by Sony Europe is facing liquidation after shutting three of the electronics giant’s Irish stores without warning this week.

Hi Fi Corner will ask shareholders and creditors to wind up the company and appoint a liquidator to it next month after conceding that it cannot continue trading in the current climate.

The company has shut its three Sony stores. The shops were in Dundrum Town Centre and the Blanchardstown Centre in Dublin, and Scotch Hall retail mall in Drogheda, Co Louth.

Shoppers who arrived at the Dundrum outlet yesterday were greeted with a notice on the door stating that it had been shut due to circumstances outside the company’s control.

Many of the shoppers had arrived to exchange goods at the store. Sony Europe yesterday pledged to honour all warranties and customer orders.

In a statement issued yesterday, Hi Fi Corner confirmed that it closed down its three stores.

“Meetings of the shareholders and creditors have been called to take place on January 16th with a view to winding up the company and appointing a liquidator,” the statement said.

“The trading environment in Ireland has been extremely challenging and, although much has been done to reduce the cost base of the company, progress has been hampered by a difficult retail climate along with expensive and inflexible lease agreements.”

The company did not comment on its debts or other liabilities, but said “further details would be disclosed” once the liquidator had been appointed.

Sony Europe took over 76 per cent of Hi Fi Corner in 2009 and pledged to provide enough cash to allow it to continue to meet its obligations.

Its figures show that it lost €2.25 million. In 2010, its auditors pointed out that there was a “material uncertainty” over its ability to continue as a going concern.

The accounts make it clear that it needed the support of Sony Europe to stay in business.

Businessman Brian Sheehan held the remaining 24 per cent of the company.

Hi Fi Corner subsequently shut two stores in Dublin, in Ballsbridge and Liffey Valley Shopping Centre, in 2010.

In the 12 months to March 31st, 2010, the last period for which accounts are available, it lost just over €1.2 million before tax.

Those accounts, which directors Peter Dawson and Alastair Fanning signed off on in September 2010, warned that the business was continuing to suffer from the impact of the downturn.

“The difficult economic environment in Ireland is presenting challenges for the company as consumers are reluctant to purchase discretionary items,” the accounts stated.

It added that falling disposable incomes and faltering consumer confidence continued to affect trade.

The accounts show that it owed creditors almost €4.3 million, while there was a deficit between assets and liabilities of close to €3.3 million on March 31st, 2010.

The statement yesterday said customers with any queries should contact 01-4131785.