Eastern Hi Fi in receivership

Eastern Hi Fi, which has gone into receivership today, specialised in high-end TVs, stereos and sound equipment.

Receivers have been called in to Eastern Hi Fi, with the company directors saying they saw no alternative.

"After all of the steps taken during the past year the company reduced its operating expenses in a satisfactory manner but it has not been able to rid itself of the leases of unused and slightly used premises which are now redundant in the company's hands and cause unprofitable trading," a statement from the directors today said.

"As the issue made by the company during 2009 was not filled, the funds then obtained to give time to turn around the business operation and quit the leases have now been used and so the directors have no ability to continue the company trading in such circumstances."

The directors asked ASB Bank, as the first charge holder over the assets of the group, to appoint receivers to each of the companies in the group. Michael Stiassny and Brendon Gibson of KordaMentha were appointed.

Stock exchange operator NZX said it had suspended trading in the shares of Eastern Hi Fi. Shares in the company last traded at 8c on Tuesday, down from a year high of 13c last June.

For the half year to the end of June the company reported a loss of $979,761.

Eastern Hi Fi's website said the company opened its first store 30 years ago in the east Auckland suburb of Howick, and three decades later held the position of this country's leading specialist audio retailer.

In its half year report in September, the company noted it had reduced its retail outlets to three - a main store in Auckland's Khyber Pass Rd, another in Wellington, and the original store in Howick.

- NZPA