Two directors of retail electronics chain Wow Sight and Sound are caught up in a property sale worth hundreds of millions, after several banks recently appointed receivers to the assets controlled by the two men.
The two WOW directors, Sam Savvas and Suds Sotiris, also serve as directors of SSI, which owns a portfolio of Queensland-based companies.
These companies, which include The Zone Australia and Aristocon, own the properties that have been placed in receivership, although the companies themselves are not in receivership.
However, WOW Sign and Sound has moved quickly to confirm that it is not involved in the receivership process.
A statement from Wow retail director Con Nicolas said: “WOW operates independently of Mr Savvas’ property companies and its strong trading record, healthy profitability and backing from other shareholders means WOW is in a position to grow strongly.”
However, the spokesman confirmed Sam Savvas has stepped aside as chairman and chief executive, and Nicolas will assume the role of acting chief executive.
Savvas has told The Australian that WOW is performing well and that these properties have been appointed receivers due to “increasing pressure in global and national property markets”.
“These appointments are directly linked to a general lack of liquidity in property markets domestically and in no way reflect the financial situation of the retail business, which continues to trade strongly throughout Australia.”
It has been reported that Lloyds Bank, St George, Bank of Queensland and Suncorp have appointed receivers from firms including KPMG, Deloitte, Korda Mentha and McGrath Nicol to recover money owed from the properties.
These firms were all contacted for comment this morning but no reply was received before publication except from KPMG, which stated that it could not discuss work that is currently ongoing.
It has been reported the portfolio of assets is worth over $300 million, and includes the Melbourne Hotel in Brisbane and another commercial building worth about $70 million. It has also been reported Lloyds Bank is seeking to retake more than $200 million the bank is owed.
Reports also claim CB Richard Ellis Queensland managing director Bruce Baker has been appointed to sell the properties.
Earlier this year, WOW accepted a “substantial” amount from NAB’s private equity division, Integrated Capital Solutions. At the time, WOW retail director Sam Savvas said the company hopes to expand but has trouble finding property.
“We try to choose what we call Mayfair sites – high profile sites – and not everyone wants to sell those sites for development. But now we are moving to leasing strategy, developers are rushing to talk to us. It’s opened up the floodgates,” he said at the time.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
