Apple Australia faces bad Buzzle buzz

The defunct Australian Apple reseller group, Buzzle, owes $30 million, most of it apparently to Apple, according to an article in the Sydney Morning Herald . Financial company KPMG was appointed by Apple on March 30 to handle the matter.

Apple Australia’s corporate affairs manager Myrna Van Pelt said a “debilitating state of the business systems” was “very much an acknowledged problem” with the Buzzle group, according to the Sydney Morning Herald. The spokesperson declined to comment on how Apple would recover from the damage to its brand and market share. “We will recover … we’ve always said this was an isolated event and we’re continuing to work with resellers. We’re waiting for the full audit from the receiver,” she said in the newspaper article.

Scott Kershaw, receiver at KPMG, said he expected to sell the Buzzle stores as going concerns.

“We’re seeking buyers for the group as a whole, or for individual stores,” he told the Sydney Morning Herald. “We’ve had expressions of interest from Buzzle directors, from managers of stores, and from some outside of Buzzle. The deadline for bids is April 20.”

The Buzzle consortium, which together owned 24 of Apple’s 68 Apple Center stores and accounted for more than 35 per cent of Apple’s revenue in Australia was formed in July last year. Members hoped to improve margins with better buying power, and gain better reach from single-brand advertising. Resellers who took part in the merger included Choice Connections, Design Wyse, GM Computer, Mac’s Place, Manning Computers and Status Graph. The consortium intended to float on the Australian Stock Exchange, the Sydney Morning Herald reported.

“But sales dived almost immediately and even the traditionally strong pre-Christmas period failed to revive them,” said the article. “Logan Ringland, PC market analyst with research firm IDC, said Buzzle was a victim of a ‘screwed-up’ market.”