(26 NOV 2012 – updated 29 NOV at end)
Parramatta Road in Sydney’s inner west suburb of Camperdown was a guitar hub – until last week home to a large Billy Hyde store (closed); a busy Gallins Pro Shop (very open), and a double frontage mecca for guitar collectors – Jacksons Rare Guitars. Now just Gallins remains, as Jacksons has become very rare indeed.
Boutique Music Wholesale Pty Ltd and Jacksons Rare Guitars Pty Ltd have had Administrators Appointed, and the shops were stripped earlier in November.
Administrator(s Deloitte are trying to mark sense of the mess.
What makes this more than just the collapse of a retail store is that for many years Jacksons has sold rare and valuable guitars on consignment. Some of the owners have not been paid, and many do not know whether their guitars are in the possession of Deloitte’s – or not.
Pre GFC there were glowing stories in the financial press about the rapid appreciation of vintage guitars – with Jackson at the epicentre. They published this article, see ’42 Guitars’ chart below, conveniently showing the value trend headed for Mount Everest.
The following is not substantiated, so you can read this as either an allegation or a rumor.
According to reports, investors were buying rare guitars, sometimes from Jacksons, as an investment for their self managed superannuation fund. The rules around collectables such as guitars or artworks are that they can’t be hung in your home or business. They must be ‘held’ by a responsible party, kind of like a customs lockup.
Various parties have said that Jacksons had a safe roof upstairs, in which were a treasure’s chest of vintage guitars, some worth more than $50,000. Deloitte’s, to their credit, have allegedly told some owners that if their guitar was seized from the shop and if the owner can establish ownership, they will get it back.
Still more stories have emerged, none that can be substantiated, where owners claim their consignment guitars were sold without them being advised or paid. One story that CX cannot verify is that a superannuation guitar was sold more than once – because it never left the premises.
Deloitte’s can and could have relied on the new Personal Property Register to deny owners any chance of return of their guitars. Under the PPR, which was launched in January, an owner must first register title to their guitar with the PPR (at a small cost), and then consign. An insolvency firm is entitled to retain and sell ANYTHING that is not covered by a listing on the PPR, no matter whether you have proof of ownership.
It’s another trap, and the best medicine is to never, ever consign anything. Jacksons is not the only reseller of collectible to go broke, for whatever reason.
CX has been told that Steve Jackson addressed the creditors meeting on 28 November without detailing anything specific. It appears Deloittes have resigned due to conflict of interest involving a guitar – and another insolvency practice has been appointed. More when we know more.