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Angel Investor (Individual)

Investments

1

Portfolio Exits

1

About John Winter

John Winter is the former CEO of Barclays Corporate Banking.

Headquarters Location

United Kingdom

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Latest John Winter News

Which Retailers & Suppliers Face Problems In 2024 As The ATO Moves To Collect Outstandings

Jan 3, 2024

A record Black Friday and a “brilliant” Boxing Day has delivered record sales for CE and appliance retailers with both JB Hi Fi, The Good Guys benefiting from the lift in revenues however smaller retailers in particular audio and custom install operators are facing new problems with the ATO Set to move on several specialists for unpaid tax bills, according to sources. Harvey Norman whose web site was down for the Black Friday sales bonanza had a record Boxing Day sales period according to insiders with many brands tripling normal weekly sales of goods across the Harvey Norman network. One premium appliance brand who normally sells 10o to 150 premium products a week reported sales of over 400 units in the six days during and after boxing day. One notebook seller told ChannelNews that sales in the last quarter have made up for the “previous two quarters”. The retailers that appear to be under stress is the premium audio and custom install market with this set to have a kick on affect with suppliers several who are now offering consignment stock to retailers in an effort to get a sale. The next problem is that many small retailers and some suppliers still owe the tax office millions in taxes with the tax office set to move to place into liquidation businesses that are struggling and don’t have the assets or resources to pay off their current tax bills. During the past 12 months the unpaid taxes and business debts owing to the ATO soaring to $45bn, up from $26.5bn before the pandemic, insolvency experts expect a more assertive debt collection approach by the tax office in 2024 could tip many more businesses over the edge in 2024. One key NSW retailer said, “The problem is that the younger audience are not getting to experience real sound, high quality sound, they believe that Sonos is premium sound, when it’s not, it’s inferior sound”. “This audience is key to the future of audio sales the only problem is that the mass retailers such as JB Hi Fi, The Good Guys and Harvey Norman are only selling entry level or affordable audio instead of premium sound. The younger audience are not being educated on what is premium sound and they are struggling to find a location where they can experience high quality audio”. Several insiders have told ChannelNews that they believe that several small retailers “will go broke this year” of sales frail to pick up. “Retailers are competing with tourism where experience getaways are reaping in the dollars at the expense of retailers” claims Bruce Thierbach General Manager of Audio Active. John Winter, the CEO of the Australian Restructuring Insolvency and Turnaround Association claims that the impact of cost of living and higher interest rates is being played out at the checkouts and that 2024 is not shaping up to be a good year. Australian Securities and Investments Commission research reveals that there were 11,223 company collapses for the year to December 3, up 37 per cent from 8140 for the whole of 2022. Construction accounted for the lion’s share for the period with 3046 failures, up 27 per cent compared to the full 2022 year. This is having a major impact on custom installers, several who have gone broke already. Winter claims that retailers “Generally rely on high profits in the summer to carry them through the year. If that doesn’t happen, they can be under serious pressure to survive later in the year. The year-to-date insolvency figures are slightly higher than the equivalent pre-Covid period in 2019, before temporary measures were put in place to protect vulnerable businesses during the peak of the pandemic. On the issue of tax collections Winter said the ATO had a responsibility to take more action to claw back business debts, after remaining “quite passive” throughout 2023. “While they have sent plenty of threatening letters to taxpayers, they have not really been doing their job in enforcing recoveries,” he said. “When the ATO doesn’t do its job in demanding payment of tax debt, they become an unofficial lender; they knowingly ramp up the debt load of those businesses. “What that does is put other creditors at risk – generally other small businesses. That’s a real problem when the ATO is knowingly allowing this to occur.” Up to December 3 there were 4684 insolvencies in NSW, up 42 per cent on the calendar year of 2022; 2822 in Victoria (up 27 per cent); Queensland has 2156 up 45 per cent; Western Australia increased 25 per cent to 785 and South Australia 455, up 57 per cent. The construction industry has been the biggest contributor to nationwide insolvencies over the course of 2023 as builders, bound by fixed-price contracts, faced rises in materials and other building costs. Oracle Insolvency Services partner Yulia Petrenko said some builders were coping better than others with the difficult market conditions, while more pain was likely for those struggling to win work in a competitive marketplace. “Some builders and tradies are doing exceptionally well with work locked in for years, while others are flailing under fixed-price contracts, a lack of skilled labour and the supply and cost of materials. Talking to the Australian Jirsch Sutherland partner Andrew Spring said the holiday trading period was shaping up as a major test for retailers across the country. “We recently engaged with an eCommerce business that described sales as ‘dropping off a cliff,’ principally due to cost-of living-pressure on discretionary spend,” he said. “In my view, we are seeing a correction away from the more willing consumer spending behaviour of the last couple of years, and that’s likely to continue into 2024 as household savings continue to decline. “There’s been plenty of talk about consumers watching their pennies at Christmas, and that will be a key challenge into the new year. “Traditionally we see an increase in insolvencies in the retail sector in the first quarter of the year if a slower-than-expected Christmas period occurs.” Mr Spring said personal insolvencies were also likely to continue to rise in the new year, following a 29 per cent spike in the September quarter. “There’s usually a lag between when a company is wound up and when a director declares bankruptcy or uses another of the personal insolvency regimes,” he said. “According to AFSA (Australian Financial Security Authority) statistics, in the September 2023 quarter over 25 per cent of personal insolvencies were business related. “As business costs continue to spike, we believe there’ll be more business owners that will personally end up in financial distress – particularly if they have provided personal guarantees.” About Post Author

John Winter Investments

1 Investments

John Winter has made 1 investments. Their latest investment was in Vantage Power as part of their Angel on March 28, 2017.

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John Winter Investments Activity

investments chart

Date

Round

Company

Amount

New?

Co-Investors

Sources

3/28/2017

Angel

Vantage Power

$3.11M

Yes

5

Date

3/28/2017

Round

Angel

Company

Vantage Power

Amount

$3.11M

New?

Yes

Co-Investors

Sources

5

John Winter Portfolio Exits

1 Portfolio Exit

John Winter has 1 portfolio exit. Their latest portfolio exit was Vantage Power on April 23, 2019.

Date

Exit

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Acquirer

Sources

4/23/2019

Acquired

$99M

1

Date

4/23/2019

Exit

Acquired

Companies

Valuation

$99M

Acquirer

Sources

1

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