FOUR years after he sold nut and snack food distributor Stirling Foods, Barry McGougan has decided to take back the reins and bring the struggling business out of administration.
Mr McGougan and a team of four Western Australian businessmen will form the new board of the Balcatta-based company, which was placed under the administration of accounting firm Crowe Horwath in August.
Mr McGougan and his new partners have prevented more than 25 staff redundancies, and the company’s Olympic Fine Foods business has also been rescued.
Stirling Foods bought Olympic Fine Foods, then its major competitor, for $1.83 million from WA-based food company FFI last September.
Mr McGougan started Stirling Foods from his living room in 1982, and by 2007 the company was turning over more than $12 million per year.
Feeling like he needed a break, Mr McGougan made the decision to sell the company in 2007.
“At the time I sold the business Stirling Foods was the number one distributor of nuts and snack foods in Western Australia, but I was burnt out because I was making all of the decisions myself,” Mr McGougan said.
“I’ve had four years off now and I have been looking to get back into something for the last six months.”
To avoid the possibility of taking on too much responsibility himself, Mr McGougan decided to team up with Accuweigh Group CEO Brenton Cunningham, Accuweigh CFO David Hatton, Food Industry Association director John Travers, and TFS Corporation director Ian Thompson.
Accuweigh is the country’s biggest supplier of weighing and packaging equipment, and Mr Cunningham said he and the other partners saw an opportunity to keep Olympic Fine Foods and Stirling Foods owned by local interests.
“Most of our competitors now are eastern states companies,” Mr Cunningham told WA Business News.
“And there were a lot of operators from over east wanting to bring the company out of administration, so we thought it was important to keep the company as WA owned and saw the potential to expand into the east ourselves.”
However, Mr McGougan’s reasons for reviving the company were much more personal.
“I didn’t want to see something I created completely degenerate,” Mr McGougan said.
“I thought, the day I drive up Cressall Road and see those gates locked I will be very sad, because that was something I put my heart and soul into for more than 20 years.”
In addition, he said saving more than 25 staff from losing their jobs was also a rewarding part of the acquisition.
“If we hadn’t bought it, the equipment would have been sold off and it would have become an empty warehouse, not to mention all the staff losing their jobs,” Mr McGougan said.
“Even though I wasn’t personally responsible for what happened here, I felt satisfaction that I was able to offer them all their jobs back … so we have saved those jobs and are looking for more people to come on board with us.”
However, Mr Cunningham said getting the company back to where it was when Mr McGougan sold it in 2007 would be a significant challenge.
“We want people to know what the company was, and is not what it is now,” he said.
“Olympic alone used to have a turnover of around $6 million, but we’ve picked it up and it’s tracking at about $4 million, so it has deteriorated quite significantly.”
While the figures are a focus for Mr McGougan, re-establishing the trust of customers is another major concern.
“Trust is a big thing in business, it’s not about hitting a certain figure, it’s about getting that reputation back,” Mr McGougan said.
“We really have to build from the ground up again because customers have been hurt for a number of years and we won’t get it overnight; all we ask is that people give us a go again.”
