Bloodiest business story of the year
The murder of Sydney property developer Michael McGurk sent shockwaves through the business community and political sectors.
McGurk was shot dead outside his family home in the exclusive suburb of Cremorne, reportedly in from of his nine-year-old son. The father of four had become involved in a string of property disputes in recent years with prominent developers Adam and Ben Tilley and Ron Medich, although there is no suggestion McGurk’s murder is connected with these cases.
McGurk also claimed to have evidence of corruption that could bring down the NSW Government, although these claims were never proven.
Launch of the year
Bargain hunters had long wished for US retail giant Costco to open in Australia and in August their wish was finally granted with the opening of the company’s Melbourne warehouse.
Thousands of shoppers hit the store in the first days of trading, snapping up office supplies, tyres, plasma televisions and toilet paper. Crowds have remained strong, despite the fact shoppers need to buy a $60 membership to be able to shop.
Costco is already working on plans for a store in Sydney and is likely to expand into other capital cities after that.
Most embarrassing moment of the year
No contest in this category. In the middle of the year, electrical goods retailer Clive Peeters started reporting is was investigating certain “accounting discrepancies” within its business. In August, the mystery was solved, after payroll officer Sonia Causer allegedly admitted to defraud the company of around $20 million and investing the money in over 40 properties around Australia.
The cash, allegedly siphoned through falsified entries in the company’s payroll accounts and transferred into Causer’s account, was apparently taken over a two-year period – which raises some questions about Clive Peeters internal controls.
Clive Peteers was in luck however – Causer cooperated with the investigation and has agreed to transfer ownership of the properties to Clive Peeters. The proceeds of the alleged fraud were almost double the operating profit of $10.3 million that Clive Peeters posted in 2007-08.
Bargain hunter of the year
Veteran rag trader Jeff Moss is perhaps best known for establishing the Pretty Girl Fashion Group in 1989 and later selling half of the business to the Packer family in 2000, but this year he emerged as a canny bargain hunter.
In August he purchased the apparel business of struggling toy company Funtastic for around $5.4 million, grabbing a business that mainly makes children’s clothing under license for kids’ brands such as Bob the Builder, Thomas the Tank Engine and The Wiggles.
A month later he bought the rights to more than 20 brands and licenses owned by collapsed company Mecury Brands, including brands such as No Fear, Purr, French Kitty, Crusty Demons, KANGOL, Roar, ROCHFORD Australia, itsu and Billiecart.
The rag trade is a tough game that is getting tougher every day, but Moss believes he’s got two great bargains.
Biggest personal collapse of the year
Just over a year ago, Daniel Tzvetkoff was one of Australia’s leading young entrepreneurs, with a fortune of $120 million (in conjunction with his business partner, Sam Sciacca). But in June his empire came crumbling down under the weight of a reported $80 million of debt.
The pair’s main business was Intabill, an online payments company, which appears to have specialised in the online poker sector. Another business associated with Tzvetkoff, luxury boat company DSB Cruises, was placed in hands of receivers in June, while it was reported that many of Tzvetkoff’s luxury assets, including his Lamborghini with the licence plate BALLER, were repossessed.
Later in the year, Tzvetkoff, who is just 25, sold his unfinished mansion on the Gold Cost for $17 million. Most of the proceeds will go to creditors.
Most pointless penalty of the year
In early December, Lance Atkinson, a New Zealand citizen living in Queensland, was ordered by the US Federal Trade Commission to pay $US16 million for running an illegal spam enterprise, which experts have called the biggest in the world.
Sounds like a harsh penalty, until you hear one detail – Atkinson will only be forced to pay the fine if he enters the US. He also has a $US2.2 million fine against his name that was handed down in 2005.
An effective deterrent? We don’t think so. Don’t expect to see Lance living it up in Las Vegas or touring Hollywood anytime soon.
Best Government decision of the year
The introduction of Rudd Government’s Fair Work industrial relations regime hasn’t thrilled SMEs, but we’ve got to give credit where credit’s due – the decision to introduce the 50% investment allowance for small businesses in the May budget was hugely helpful.
Not only did the allowance give companies a chance to invest for growth, it also helped stimulate the business-to-business economy at a time when this was badly needed.
A positive, well-timed decision from a Government that hasn’t exactly put small business at the centre of its agenda.
Dill of the year
Ashley Towns, the 21-year-old TAFE student who created the world’s first iPhone virus, had no idea of the storm of controversy he would unleash when he released his virus, which displays a picture of 1980s pop star Rick Astley on the user’s home screen.
The virus didn’t appear to do much harm, but Townes reported receiving death threats over what he later admitted was a “pretty stupid thing to do”.
Not all of the attention was bad, however. Townes claimed to have parlayed his 15 minutes of fame into a job as an iPhone developer.
Best (and worst) prediction of the year
Late last year, veteran forecaster and IBISWorld boss Phil Ruthven declared Australia was headed for recession. In April, he happily came out and said what very few commentators ever say – I was wrong.
Of course, Ruthven’s recovery call came much earlier than many other pundits, so his reputation as a sage remains very much intact.
Indeed, Ruthven is so bullish about the state of the economy that he is now predicting that 2011 will be a “bloody ripper” of a year. We’re hoping he hasn’t messed that one up too!
iPhone app developer of the year
We’ve watched the development of the iPhone App market closely here at SmartCompany and have brought you a number of local developer-who-struck-it-rich type stories.
Perhaps the most successful is Robert Murray, head of the Firemint development studio in the Melbourne suburb of Richmond, who built the game Flight Control for about $50,000.
Shortly after launching the game was the top application in Apple’s App Store in 19 countries.
The Flight Control app, which sells for $1.19, is believed to have been downloaded well over one million times. Revenue is split 70% to the developer and 30% to Apple, so Murray has done very well.
Cheekiest press release of the year
It’s not easy being a junior resources company on the Australian Securities Exchange, fighting for attention for companies like BHP Billiton and Rio Tinto.
So when something good happens, shout it to the rooftops! That’s exactly what Perth clean energy company Liberty Resources did in September, when it proudly made an announcement to the ASX that it has managed to arrange a one-hour meeting with Virgin Group founder Sir Richard Branson, who will be in Perth in March 2010.
Yes, that’s right – a whole hour with the bearded one! While the release doesn’t say exactly what the meeting will cover, Liberty happily explains that Branson has recently started a new venture called Virgin Fuel, which has the stated ambition of investing around $1 billion into alternative fuels over the next four years.
Raunchiest story of the year
Tight contest for this award this year. In June, we had the story that domain name sextoys.com.au had been sold for $25,500, at the time an Australian record.
In October we had a takeover tussle between Melbourne-based Sexyland and Perth-based Adultshop, with the former yet to acquire the latter.
But the title must go to our September story detailing the collapse of the Australian wing of international restraint chain Hooters.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
