Auckland-based computer retailer Cost Club is to be bought by a new company, Best Buy, at a time when it is facing legal action from at least two vendors.
Fujitsu confirmed this week that it had filed legal proceedings under section 264 of the Companies Act to have Cost Club wound up. Another vendor, which asked not to be named, says it has instructed its solicitors to take similar action.
There were market rumours this week that the superstore owner was going into receivership.
The deal with Best Buy is all but done. The shareholders are an unnamed group of private investors, with Cost Club general manager Mark Mahony retaining a significant minority.
Mahony says Cost Club’s business plan for this year was based on continued strong growth in the retail pc market. “This growth has simply not happened.
“To meet these challenging retail market conditions, it has become necessary to adopt a new ownership structure — bringing in new finance — and to implement minor changes in our product range and business model.
He says Best Buy will continue to operate both the Auckland and Hamilton stores, together with the Cost Club 0800 direct operation. Much the same mix of product lines will continue to be sold.
Existing Cost Club creditors will not be disadvantaged by the sale, he says.