Next Byte costs parent company $15 million

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Next Byte costs parent company $15 million

Next Byte parent company Vita Group has recorded an expected impairment charge of $15 million for its Apple reseller business, contributing to a company-wide net loss of $12 million for its full 2012 financial year.

Sales for the Next Byte business in 2012 were down 21 percent to $107.2 million. Vita Group CEO David McMahon said last month the impairment charge was associated with a goodwill clause in the company’s 2007 acquisition of Next Byte and was unrelated to sales performance.

Vita Group acquired Next Byte in 2007 for $30 million.

Vita Group is hoping its move to convert the Next Byte brand into “APR” (Apple Premium Reseller) outlets will grow its B2B sales and double its revenues.

Vita Group first revealed its plans to renovate the underperforming Next Byte brand in early July. McMahon told shareholders the Next Byte business had changed considerably since its acquisition, and therefore required a new outlook.

The company has been opening the new stores in areas it believes Apple is least likely to establish its own stores. It has been forced to relocate its newly-refurbished outlet in the Sydney suburb of Broadway after Apple announced a new store opening of its own just metres away.

All 18 Next Byte stores nationally will be rebranded as APR stores. Four outlets in Townsville, Mackay, Rockhampton and Cairns have already been transitioned.

McMahon told CRN in July the stores would not lose the Next Byte branding completely, but the outlet's fit-out and fixtures would mirror the interior design of an Apple store.

Next Byte branding will still be visible via exterior signage, but the branding will change to "Apple premium reseller". The nationwide rebranding is expected to be completed in the next eighteen months.

Established in 1995, Next Byte is Apple’s largest premium reseller in Australia.

Vita Group is also currently converting its Fone Zone brand of retail outlets into Telstra stores. To date 11 have been converted, with 41 Fone Zone branded outlets left.

Vita Group operates 182 outlets nationwide, including 91 Telstra and Telstra Business Centre shopfronts.

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