PixiFoto questions still unanswered

The outcome for employees and other creditors of Photo Corporation Group (PixiFoto) remains uncertain, with the administrator, BCR Advisory still waiting for PCG director, Peter Watt, to issue a Deed of Company Arrangement prior to the next meeting of creditors.

Peter Watt - managing director of Photo Corporation Group.

Peter Watt – Cyprus resident and managing director of Photo Corporation Group.

An urgent assessment of the financial position of the company led to the decision to close down the 42 Australian photo studios, and to wind down the remaining operations. The head office and laboratory operations in Granville, NSW, are currently continuing to trade in administration, to complete outstanding customer orders for both PixiFoto customers and the (now sold) Pixifoto Schools business. The Granville lab will continue on until mid-September.

The first meeting of creditors of the company was held on August 6, at which time the appointment of administrators was ratified and a committee of creditors was appointed.

The PixiFoto collapse extends beyond Australia, with the New Zealand operations also in administration. PixiFoto operated from eight The Warehouse outlets in NZ, mainly on the North island.

However PixiFoto UK and Ireland continue to trade. A ex-staff member told Photo Counter that she believed Peter Watt may have been involved in purchase of the UK operations from PCG. Another source confirmed that the UK business had been sold, but did not reveal to whom. There are 34 mobile and permanent outlets in Ireland, and an undisclosed but far larger number in the UK, where it operates in selected Boots, Mothercare, M&Co and independent stores.

The Group’s UK operations were acquired in 1993, the Dutch operations (no longer operating) commenced in 1994 and Ireland in 1995.

In addition to the retail operations, PCG had film processing and printing laboratories in Australia, the UK and NZ, and at one stage employed approximately 2000 full-time, part-time and casual employees. It described itself as ‘the largest in-store mobile and permanent portraiture company in the world outside the United States.’

Independent Photo (IPS) is believed to be one of the larger creditors among local photo industry suppliers, and managing director Stuart Holmes is on the creditors’ committee. He told Photo Counter that PixiFoto had been among his company’s top 10 clients, with most business generated by the Schools division.

‘It’s a bit of a kick in the guts,’ said Mr Holmes. ‘We were fulfilling the Kodak supply agreement with PixiFoto, and so we were somewhat caught in the crossfire,’ he said.

Other known major creditors include Westpac, NEC (computer systems) and Konica Minolta, but a full list of creditors and outstanding obligations is yet to be published. It’s believed, but unconfirmed, that PixiFoto’s debts are under $3 million, the bulk of which is owed to staff.

Recent sale of Schools division 

Suppliers were not alerted to Pixifoto’s recent sale of its Schools Division to Master Schools Portraits (MSP), Wagga, leading IPS to forward-order now unwanted shipments of paper and chemistry in the unusual widths required by PixiFoto Schools. (Master Schools operates its own photofinishing lab in Wagga and, although an IPS customer, doesn’t use the same paper sizes.)

‘Kodak is trying to assist us to redeploy that stock elsewhere. This was totally avoidable if we had been told the schools divisions was to be sold. In this situation we’ve been let down by the customer, but we will weather this,’ said Mr Holmes.

He added that MSP was a very efficient, quality-conscious operation, which would now become an even more important player in schools photography. ‘From that point of view, this is a good outcome,’ said Mr Holmes.

It’s not known whether the proceeds from the sale of the PixiFoto Schools Division have been used to reduce the parent company’s debt.

‘We are aware of, and are currently examining a sale of business contract which was entered into by the company prior to our appointment, the particulars of which are commercially sensitive,’ BCR’s Damien O’Reilly told Photo Counter in response to questions about the Schools Division sale.

‘Regarding the balance of your questions regarding the financial position and potential sale of the company, we are currently investigating these matters, and as a result, it would be inappropriate for us to comment.’

Shabby treatment of staff

Staff, many of which have been with PixiFoto for 10 years or more, were alerted by phone on Sunday evening that there would be a conference call the following morning. At the 11am conference call, most employees were sacked immediately, with one person from each outlet kept on to liaise with customers.

They were paid for their last two week’s work but have yet to be told whether entitlements such as long service leave, holiday pay and superannuation will be paid in full.

‘It was very distressing the way it happened,’ one ex-staff member told Photo Counter. ‘Two hundred and seventy seven people sacked over the phone.’

Another ex-staff member contacted Photo Counter to describe an unhappy, bullying work environment deteriorating over the past two years, with studio staff being pushed to the point of having to take stress leave, relentless and unrealistic demands to up-sell and constant and aggressive monitoring. It’s been claimed that junior staff were exploited financially, head office harrassment was a daily occurrence, and maintenance of equipment including studio lighting was neglected to the point that there were occupational safety issues.

The co-director Peter Watt has apparently had little day-to-day involvement in the running of the company recently. He now lives on an island in Cyprus, according to ASIC documents. Former director and now company secretary Mike Roubicek has played more of a general management role. The other director in PCG is Peter Watt’s son, Michael Watt, 29, who still resides in Australia.

The following Facebook comment from an ex-staff member – who last week was still trying to help customers locate orders, secure digital files, refund lay-bys, etc – provides an insight into the schism between staff and management at PCG:

I am furious that the owner of this business can be so unprofessional as to give us less than one week to organise the ordering and pick-up of customers’ images. It is unprofessional to allow only one staff member to be paid this week, while all others were callously dismissed on the very day we found out. I am thankful that I had the aid of those staff members, who came in unpaid to help me get as many lay-by’s finalised with copyright, and to get orders collected.

This same business owner has the same thriving business in the UK, but claims we won’t get paid our entitlements for possibly one to three years. This same man will allow each and every studio, including every portrait held there, to be dismantled and destroyed.

I feel saddened for the many people that I could not contact and for one reason or another, have not heard the news. There are customers overseas who believe their portraits are safe. Our business, while not the high achieving days of say, five or six years ago, was still fruitful. I was forced to cancel 50 appointments this week and still had people come into the studio today, our last day, to make a booking. It is a sad day to lose such an iconic Australian brand name.

I reckon I can speak for all of the Photo corp employees when I say: We did our best to get all our valued customers their images.

 


19 thoughts on “PixiFoto questions still unanswered

  1. I take my hat off to at least one local employee in my town who appears to have spent a week working for nothing helping customers get their photos. Tough stuff for the workers.

    • More is coming out of the woodwork following the creditors meeting. Was a large amount of money skimmed off the company just prior to the demise? Where is the Australian government at times like this?

  2. All staff are shattered that “uncle Pete” as we all had nicknamed him in the days have left us all with absolutley nothing. While he is sitting under the sun in Cyprus living in his multi milion dollar home we are all here fighting for our entitlements. We’ve had staff here that have given 30 years of their lives to fill uncle Petes pockets and what have we got now. Absolutley nothing. Peter Watt sold the Uk business to himself and the assetts that they are all talking about which are supposably going to pay the staff their entitlements are all in other peoples names and other business names. What a rort. Have a heart Peter Watt!

  3. Greedy Peter Watt does not give a damn about his employees…. experienced this in 2004 when I came back to work after a 2 week holiday and then to be told by the new GM that the technician and her have discussed by position and decided to make the position redundant….I wasn’t involved with the discussions only involved in being sacked or take a trainees position. Gave 10 years of loyal service, Peter probably sleeps well at night as he has no heart and no conscience..lucky I was paid out all my entitlements unlike these poor people …..Good luck to all of you

  4. I am very upset the lab sweated so much to keep this business coming along! The tears the screams the laughs the signing the dancing the most important professionalism we gave this company for Peter watts company! Can’t believe some people that was let go got there money so easy and that was cause they didn’t need them so they left the people he thought would keep going and work harder! Well we did and now look at us we get nothing just a heap of paper work to fight for what’s should be entitled to us! Pixifoto was a pleasure to work for but to have this happen knowing I could of just left and find another job but I didn’t I stood by knowing one day company will close but I know I have invested my heart in this job and I will get what I deserve with many others but now look “nothing for now” I just pray we will get what’s owned to us! Come on we deserve it! Just give up ur sunny days under the sun tanning swimming not giving a care in the world just give ur loyal employees the money! You might want the best for ur family but what about us we the ones that brought you money to have that for your family! Pay us what you know we are entitled too!

  5. I was a UK employee of Photo-Corporation for 7 years up until recently when I decided to leave. I worked within the PixiFoto branch of the company straight out of university. I was one of the very few people to enter the company with any actual qualifications or skill in photography. Coming from a hard working family background I was lucky enough to quickly climb the ladder in the company and was made a studio manager after only a year.

    I can honestly put my hand on my heart, as I’m sure the many other employees of this company would agree, and say I gave everything to PixiFoto. I sacrificed time with my family and friends just to give that little bit extra to my studio and customers. We were a thriving success for many years, named a studio of excellence which other studios were to model themselves on and my team and I were given the opportunity to train others.

    When the recession hit the UK, we began to struggle as did many other studios, however we worked harder maintaining the same ethic and professionalism that we always had to try and keep the ship sailing. Unfortunately to Mr Watt and his delegates this was not enough. I watched many staff and friends leave because unnecessary pressure was placed upon them by a company that refused to believe the financial climate had changed. For years we were expected to use the same old equipment, sell the same old products and push the same offers whilst the world developed and market changed around us. None of this was ever taken into consideration by Photo-Corporation.

    Despite our obstacles, my team and I managed to turn a profit year after year. Sometimes it may not have been what was expected, but we still managed to make the company money. However, once again this was not good enough. I myself almost lost my job a year ago because I was told I wasn’t working hard enough and my results were not good enough.

    After working for the company 6 years at the time, I was disgusted that I was yet to meet its owner. As the company continued to struggle, we were made more and more aware that Peter Watt was visiting the UK from his Cypress home to have meetings with our area managers. An opportunity presented itself in which I would meet Mr Watt. Knowing this I did not hesitate, and began writing a letter that I could hand to him myself. I wrote for hours, putting my thoughts to paper on how we, as a company, as a team, could improve and turn a corner. My intention was not to rant but simply help.

    Knowing that once our meeting was over Mr Watt would have a 4 hour flight back to Cypress, I handed him my letter and said, ‘I’d really appreciate it if you could read this on your flight home and let me know what you think’. Mr Watt winked at me and said thank you. Not more than a few weeks later I received a letter stamped Photo-Corporation. Upon opening the letter the first words I read were, ‘Unfortunately Mr Watt hasn’t had time to read your letter however he as asked me to read it and reply on his behalf’. Without reading any further, I tore the letter in half and binned it.

    That is your company Owner, Director, Chairman. Solely responsibly for the decisions made to make the company a success and he couldn’t be bothered reading a letter from a dedicated employee who just wanted to help.

    This company hasn’t failed because the prices are too high, or its employees don’t work hard enough. It’s failed because of men like Peter Watt. Spending money they don’t have on things that are not needed. Simply because they are greedy and have no care for their customers or employees serving them.

    You would think that after the colossal damage caused to so many people in Australia and New Zealand, that this company would drastically learn from its mistakes. Unfortunately they won’t. They want to make as much money as possibly by spending as little. FACT.

    And that’s all there is to it. Within 2 years or less PixiFoto will cease to exist because of Peter Watt. I am sorry for everybody who has lost their jobs because of this man but I promise you there is a silver lining. You know longer work for someone who doesn’t care what you think.

    I now own my own studio. I have never been happier. If I hadn’t left of my own accord I guarantee I would be facing what so many of you already have.

    Sorry to rant, I just wanted you all to know that your not the only ones.

  6. If anyone is wondering what Peter Watt is up to in Cyprus then check out his website: http://www.pete-watt.com
    (not that it will probably be around for long once he sees this post)

    Here is a quote from the homepage:

    “Now here I am in Paradise
    On the Island of Love
    Here I am in Paradise
    With the blue sky up above
    Living here in the sun
    Chilling out and having fun
    Here in Paradise”

  7. Things would of been a bit easier and we could of understood better and have a bit more understanding if Peter Watt would of just spoke with us when this was all happening – at least let us know what was really happening! Now all we have is a bitter taste. It’s not hard to pick up a phone and talk with us! It’s like everything we put in for company meant nothing to him and if it did this clearly shows it didn’t! If I had a company and trying to save my arse as we all need to do at least I would of had the nerve to pick up phone and say “hi everyone this is what’s happening and unfortunately this is the only option I could take but I really appreciate everyone’s hard work and still working but things are not easy at the moment” this would of been a professional way to do things. Really hope things goes well for him and especially all the staff that made Photocorp run through all these years! So sad that company closed but even more sad that Peter Watt didn’t even say “thank you”

  8. Amazing that the 3 directors can pay themselves $30,000 per month even when the company is not doing well. It takes a lot of sittings to make $90,000 profit per month, and that only covers 3 people’s wages. No wonder there is nothing left for the staff.

  9. Knowing that 3 of the corporate team are earning such vasts sums of money is outrageous! The building in Granville is currently up for sale for somewhere between $5 -$7 million, which Peter Watt will pocket. A heart is NOT something this man has, nor ethics. Total employee entitlements = $1.4 million. Keep singing, Peter, karma will avenge.

  10. So the Facebook page is gone now? I think you guys should express your feelings on the UK Facebook pages.
    Ask them how they are funding the expansion into the UK school photography market, if they can’t pay workers from their homeland!

  11. According to the UK facebook page someone from Head office seems to think that the uk PixiFoto is thriving and has nothing to do with the australian side.
    I work for a Pixi Foto studio in the UK and have done so for the past 6 months or so, I am not too sure what to expect on the job front as I know how badly our stores are suffering, I myself am on the verge of leaving due to the way we are treated, our jobs are threatened if we do not meet minimum standards each day, we constantly have area managers having a go at us down the phone if we do not perform enough for them. They seem to think we make up excuses all the time when myself and my colleagues work as hard as we possibly can and go home with alot of grief on our shoulders. If anybody from Australia hears anything about further closures across the world please post here

    • Disgruntled, can you enlighten me regarding the direction the UK are going with regards to school photos? They appear to be offering a printing service to independent school photographers since acquiring equipment and probably customer databases from the insolvent School Pictures of Mansfield. The website is here http://www.schoolpictureservices.com/school-picture-services-2/

      As for the tough environment you have described, it was like that several years ago when I was on the mobiles; a lying, bullying area manager was all that stopped me from going into a MC permanent studio – how they expect you to walk around a rainsoaked, empty retail carpark to find customers is beyond me!
      I think the UK is safe, but maybe not in it’s current form. Have a look at the available financial records and you’ll see that money has been pumped into it, while Australia had to make do with cast off equipment from the UK studios. I wouldn’t be surprised if they tried undercut these school photographers and send their own shabby set up into schools.
      I always thought it was a shabby company, look at the state of the UK head office (now the head office of the world’s biggest photographer outside the US????) and nothing surprises me with them. I genuinely think they will keep going as, like a friend of mine who has recently signed up with them says, “they have a finger in a lot of pies!”

  12. I’m based in the UK. The new School Picture Services is not part of Photo Corp UK or has anything to do with Peter Watt and was acquired for barely any cost. Other than that I can’t tell you much more about it as I don’t know, I guess it’s there to bring in extra money.

    Otherwise all I’ll say is I’m overqualified, paid a 3rd of what I’m worth and I’m working my backside off for little reward (despite being here for years) in a job that bores me to death. The top managers get brand new cars though (Audi Q7′s etc). The company is struggling though, it’s obvious.

  13. They are obviously the same company, as not only do I recognise members of staff on the page I have linked, but both Pixi Foto and Photo Corporation logos are visible on some of their tops.

  14. Im disgusted in pixi photos. In 2002 I had pics of my daughter done and was gonna layby them but when the day to pic photos and either pay or layby my father paid for my photos but pixi photos still put the application through with Certegy. Now 12 years later I have just applied with Certegy to find out I have an outstanding amount with them and black mark when they were paid for in full. Now unless I pay I will keep black mark on my name and cant apply with Certegy. I didn’t realise this had happened and have been trying to contact them but to no avail.

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