Delay in payments contributes to collapse.
Family-owned hardware company, Otter Group, went into receivership on Friday after struggling to receive payment for goods supplied to one of its biggest customers, Masters. Otter Group supplied nails, screws, rivets, wire fencing and balustrades to the hardware chain.
Although industry suppliers, including Samsung, Electrolux and Fisher & Paykel, did not confirm their concern with Masters, Fairfax media reports indicate that other suppliers have said that payments are delayed well beyond trading terms and invoices are lost or queried.
“Invoices aren’t being paid on time – you get a contract with settlement terms and they never meet the settlement terms,” one supplier said. “So many invoices are challenged even when you supply all the details.”
“We thought the invoice systems would get better but it’s worse than it has ever been,” he said. “Suppliers are getting the run around.”
Woolworths defends treatment of Otter
“Masters continues to support Otter Group during this time,” a spokeswoman told Fairfax. “We are maintaining our relationship with the business, including regular payments and stock ordering, as we have done over many months.”
“We continue to have a good relationship with the company. Masters is committed to doing the right thing by its suppliers.”
David McEvoy and Stephen Longley, of PPB Advisory, who were appointed receivers and managers of Otter Group and its subsidiaries, Ecobath and Otter Fencing, are hoping to sell the business as a going concern and have called for expressions of interest.
“There has been a strong level of interest in the business with multiple parties attracted to Otters’ brand heritage, market presence and customer base,” McEvoy said. “Our aim is to conclude the expressions of interest campaign within the next four weeks and help the business emerge from receivership in a stronger position.”