ASX listed distributor Amber Tech Limited, has started shedding staff in an effort to cut costs after the Company reported a 69% slump in profits. Sales in some divisions are down as much as 40%.
Documents seen by Channel New reveal that sales in the Companies custom installer division are down 40% this year while sales in the consumer electronics division are down 20%.
The Company who sells some of the most expensive products in both the consumer electronics market, spanning Optima projectors and Onkyo Hi Fi gear and the in specialist channel, has been suffering for several quarters, yet despite this senior directors and managers of the Company have awarded themselves significant pay rises.
This month, Amber is believed to have retrenched 6 staff including senior account managers.
Late last year the Company lost the KEF Hi Fi range and now are struggling to hold onto several other brands, which other distributors claim they have been offered in recent months.
In their latest filing with the ASX profits have fallen for the six months to December 2010 to $610,000 from $2,008,000 for the same period in 2009.
Total revenues fell to $36 Million in the same period a fall close to 5%. Sales in the consumer electronics division which is managed by Brian Lee fell 7% to $22 Million.
Lifestyle entertainment profits fell from $2,112,000 to $841,000 due to heavy discounting in the retail channel..
During the next 18 months the Company is set to come under additional pressure, due to discounting by competitors distributing Hi Fi brands, such as Yamaha, Denon and Marantz and a move by the specialist channel to parallel import goods sold by Amber from overseas distributors.
Also set to impact Amber is a move by consumers to buy goods online.
Currently Onkyo receivers are selling in Australia at up to 65% more expensive than what similar products are being sold on overseas web sites.
Last year Amber were caught out lying to the ASX, when they told the market that they were unaware of an investigation being conducted by the Australian Competition and Consumer Commission into complaints lodged with the ACCC by Sydney based Digital Cinema regarding Amber Technology.
At the time Amber had sprung Digital Cinema, importing goods from overseas, while also buying goods traditionally sold by Amber Technology from other suppliers in Australia.
In an effort to cut costs the Company slashed advertising and marketing expenditure from $1.23 Million to $825,000.
Premises costs rose from $846,000 for the period to $1,059,000.