According to ASIC records, the business was placed in the hands of voluntary administrator Adam Shepard of Sydney insolvency firm Setter Shepard on November 30. Shepard formally advertised the business for sale this morning.
Snow's Confectionery was established in 1929 by Harry Hughes, who started making toffee in his backyard kitchen. The business has remained in the Hughes family for more than 90 years, during which time the company's slogan – "I cook with glucose" – has become well known.
The company is a key confectionery supplier to supermarkets including Coles, Woolworths, Franklins and Aldi, which sell Snow's products under their home brands.
The company also has an extensive and long-established export business that sells to China, Hong Kong, Indonesia, Singapore, Taiwan, New Zealand, the Middle East and North America.
Annual turnover is $24 million and its main factory is located in the Western Sydney suburb of Wetherill Park.
Adam Shepard was not available to comment prior to publication.
Exactly what has caused the company's collapse is unclear at this stage, although the recent strength of the Australian dollar – which this morning hovered around US99c – has put even more pressure on exporters already exposed to soft retail sales around the world.
The collapse of Snow's comes as the latest insolvency figures show 774 businesses entered external administration in October, down 1% on the previous year.
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I hope (rather optimistically I fear) that most SME's will have planned their cashflow over the next three months - as I believe we will see the underlying weakness of the economy come to the fore - especially when combined with the ATO being less tolerant than last year. March is always the highest time for insolvencies annually - and it would not surprise me to see even larger levels of insolvencies in March next year.
Options for SME's to consider in protecting their cashflow over the next 3 months:
1) get monies in BEFORE Xmas as far as you can - no-one will be paid in January - make sure you are.
2) consider external finance - approach your bank ahead of a problem materialising (NOT after it has occurred - you are likely to get a negative response)
3) look at factoring options - where you can generate finance from your outstanding invoices - you may want to use a specialist broker (like Cashstream) to help you look
or finally of course (and not necessarily fully recommended)
4) Don't pay anybody until February - blaming the seasonal business culture and hope your suppliers don't cut you off.
Good luck to all
Tim Lea