Source - DOM 14/lO/02

Headline - Last encore for used-PC firm

By TOM PULLAR-STRECKER

WELLINGTON firm Eastbourne Electronics, which retailed and auctioned
second-hand computer equipment some purchased from failed businesses
has itself succumbed to hard times and is in liquidation.

The company, which traded as Encore Computer Auctions, was founded in
1981 and rode out a few IT industry recessions before being snared
by weak demand for used PCs.

Receiver Bruce McCullough says in his f1rSt report, dated September
19, that the fInn went down with debts of close to $500,000 and stock
and other assets worth perhaps $340,000.

"The company had traded successfully over a period of time as Encore
Computer Auctions as well as opening shops in rural New Zealand.
"It appears market conditions changed rapidly without the company's
directors perhaps realising how quickly major retailers such as
Dick Smith, Noel Leeming and others were able to bring to the market
sophisticated computer packages, with associated hire purchase fmance at
prices not much higher than many would have expected to be the price
for second-hand goods."

The firm acquired a lot of second hand equipment with relatively little
value, he says. It agreed to buy "a great deal" of used computer equipment
from a corporate last year, committing it to "significant expenditure".

This, and a downturn in retail trade, led the fnm to axe its retail
stores and transport all its stock to Wellington. But this was not enough
to save the business.

Mr MCCullough says directors, didn't keep the fnm's accounting ,
records up to date, so it faces unknown debts to the taxman as well as
other creditor claims.

"At this stage there appears to be four years' financial statements not
completed, as well as associated tax returns and gst returns outstanding."

Wellingtonian Richard Simpson was appointed liquidator late last month.

Source - DOM 14/lO/02.