Car audio, home entertainment and mobile phone retailer Strathfield Group has been placed in voluntary administration.
The company said that, given worsening economic conditions, consumer demand and generally falling asset values, the board has recently reviewed the affairs of the company.
The review had revealed substantial impairments of goodwill, receivables and inventory values.
The impairments would be recognised in the company's half year accounts, which was likely to result in a negative net assets and shareholders funds position as at December 31, 2008.
"After due consideration of the company's recent performance ... and the continued negative and worsening retail outlook for at least the first half of the 2009 calendar year, and in particular the significant deterioration of the company's working capital position and funding requirements going forward that have emerged following poor Christmas trading figures, the board has resolved to take decisive steps to restructure the Strathfield Group,'' the company said.
The Strathfield board has appointed Brian Silvia and Andrew Cummins of BRI Ferrier as voluntary administrators.
Strathfield said that subject to a report from the administrators, the company hoped to emerge from voluntary administration under a deed of company arrangement (DOCA) which may be put up by the company with the funding support of its largest shareholder.
The company said that it may shift towards a franchising business model once a rationalisation process had been finalised.
"In this regard, the board wishes to advise that it has been in discussions with the company's secured financier, its largest shareholder and its largest trading partner, and at this stage believes to have their collective support for a restructure that should result in a more robust, efficient and focused business model going forward,'' the company said.
Strathfield shares were placed in a trading halt on January 23 and remain suspended. They last traded at 0.6 cents.