Austin defensive but short on details

SYDNEY: Troubled Australian wholesaler Austin Group has quashed media reports it is up for auction, citing recent shareholder activity as proof better times were ahead.

Late last month, metropolitan newspaper Sydney Morning Herald reported the company had put itself up for auction following successive profit losses and significant staff cutbacks. The paper claimed the group was struggling to compete against retailers selling more of their own generic brands imported directly from China.

Company representative Chris Oldfield confirmed the newspaper had run a "general" clarification but said the article was full of factual flaws and the group was simply undertaking a strategic review.

He admitted the company had engaged corporate advisers Kidder Williams Limited to "explore strategic business and commercial opportunities" but would not be drawn into commenting on the advisors' initial findings, a time-frame for the review nor any initiatives the company currently had in place to overcome its woeful financial performance. In August, the company reported a loss of $681,000, following a $1.4 million downturn in 2005/06.

While Oldfield admitted the company had "not performed as strongly as anticipated", he said the recent acquisition of shares by senior management proved Austin Group was committed to improve shareholder value. Earlier this month, chief executive Brendan Santamaria had acquired 12.3 million shares or 19.5 percent of the issued capital in the company and new chief financial officer Dough McLean had acquired three million shares, representing 4.9 percent of issued capital.

"What bigger vote of confidence do you need than two senior executives becoming major shareholders in the company?," Oldfield said. "Following that announcement, our share price went up."

Oldfield said the company was now working internally to boost its performance but again refused to comment on what processes had been instigated.

"The review [by Kidder Williams Limited] is continuing and we are exploring different directions."
Brands in the Austin Group stable include women's brands Rochford, Playboy and French Kitty, men's brands Town & Country and Crusty Demons, and childrenswear brands Billiecart and Spud.

By Assia Benmedjdoub