CBD Printing, which is the parent of Snap Pyrmont, Snap O’Connell St, Snap Martin Place and Snap Docklands in Melbourne, appointed William Buck as voluntary administrator on 12 September.
The group had been even larger, but sold its Brisbane centre last year. It also operates the Westpac Copy Centre in Sydney, but that is not caught up in the administration.
The administrators have been locked in crisis talks with Snap Franchising to find a quick resolution to the problem.
Stephen Edwards, chief executive of Snap Franchising, told ProPrint that the main cause for the collapse was a “partnership dispute that never got settled”.
CBD Printing has four shareholders, three of whom are directors: former managing director Mike Palmer, business development director John Budgen and Rohan Erwin.
The company turns over around $10 million and has up to 50 staff across its four sites. It runs a fleet of late-model digital presses, including a Fuji Xerox iGen4, three Xerox Color 1000s and two HP Indigo 5500s.
Palmer departed the top job back in February amid a dispute between partners, with Richard Cook appointed as chief executive, said Edwards.
“The problem Richard had was he was putting out fires and trying to handle the dispute and had a cash flow issue because [the shareholders] weren’t putting capital in,” he said.
Edwards explained that Palmer elected to appoint William Buck as administrator last week, “which was a touch annoying”.
“We didn’t need to be having these conversations,” said Edwards.
Palmer would not comment, other than to say the administrator was appointed by “a majority of directors” – specifically Erwin and himself.
Edwards said CBD Printing was “a great business” in terms of its revenue and its position within the Snap network, but had invested in real estate and overcapitalised on machinery using debt funding with short payback terms.
Ironically, Snap O’Connell St was recently named the network’s top earner, generating sales growth of 14.7% over the last financial year.
“The company stands on its own two feet but they have expanded too heavily into other things… and just stretched too far,” said Edwards.
He added “the debt schedule was too quick”.
Edwards was quick to allay any fears about the company’s future, and said staff, customers and suppliers could be reassured that CBD Printing would be back on solid ground by the end of today or tomorrow at the latest. “You can’t sign paperwork quick enough.”
He confirmed that if a deal could not be struck with buyers for the business, Snap HQ would take over CBD Printing.
“There are internal and external parties interested and Snap Franchising would take a position if needed.”
CBD Printing was actually owned by Snap Franchising before being sold off around three years ago as the franchisor parent elected to move away from ownership of hubs and centres.
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