Music for Pleasure folds

Johannesburg, 08 Jul 2009

JNC SA, an MP3 and GPS distributor, has joined the ranks of liquidated sister company MiDigital, as their South African holding company, Music for Pleasure (MFP), is in liquidation.

MiDigital's liquidation has already left gaps in the supply of Xbox consoles to retailers, and the fact that its holding company is also in liquidation is likely to leave retailers short of CDs and DVDs, as well as the GPS and MP3 players that JNC distributed.

A staff member who answered the switchboard at the music and DVD distributor's Bedfordview head office on Tuesday confirmed the liquidation. The staffer, who did not want to be named and was only at the office to answer the phone, said employees were told last Tuesday that MFP was under liquidation.

The company, which employs 300 people, has not given any written notification of the liquidation and its consequences to staff, she added.

Storm clouds

The first sign of MFP's trouble occurred last week, when its subsidiary, MiDigital, was liquidated. This seems to be as a result of parent company MFP going under, since the liquidation order was made on the same day for both companies.

ITWeb could not ascertain the reasons for MFP's liquidation. However, when ITWeb questioned Microsoft's product marketing manager for Xbox SA, John Press, he indicated MiDigital had not received an expected investment.

Press said Microsoft had been notified of MiDigital's liquidation and was in the process of moving the Xbox to a temporary distributor.

“As far as we know, there were some investment partners that did not follow through with their financial obligations. Apart from that, they haven't shared any more information with us yet,” he added.

Facing the music

MFP, which was formed in 1970, owns several entertainment distribution divisions, including MiDigital and JNC.

JNC supplies products such as GPS, LCD TVs, DVD products and audio systems electronics branded as JNC to the consumer market. It also claims to distribute the leading brands of MP3 players. On its Web site, it states its JNC Navig8 GPS system is the second-largest GPS brand in SA.

Music for Pleasure's MFP Entertainment division supplies technology products, including CDs and DVDs, to companies such as Game, Makro, Shoprite, Checkers, Checkers Hyper, CNA, Edgars, Jet and the Pick n Pay group, according to its Web site.

The company's site also claims: “MFP Entertainment is the largest distributor of music, video and accessories to the South African retail chains.”

Retail troubles

Retailers have yet to indicate what the effect of the shutdown will be on the supply of MFP's technology and video products. However, last week, Edcon Group's CNA said it was having supply trouble, and had been battling to receive Xbox consoles for the past three weeks.

Patrick Raymond, CNA merchandise executive, said there is a hiatus in the supply chain and Xboxes were not being delivered. However, Microsoft has put emergency measures in place to ensure delivery of the gaming consoles resumes. ITWeb has heard that a permanent distributor has been identified, but has not yet been able to confirm this.

Musica says it will have an “out of stock” situation of Xboxes for the next few weeks as a result of the liquidation of MFP and MiDigital.