The retail chain Harris Scarfe collapsed earlier this year in a blaze of controversy over missing funds, taking with it recently acquired online retailer dstore.
Since the collapse, Harris Scarfe's administrator Ferrier Hodgson has placed both companies up for sale, with HotShed submitting an offer to acquire dstore for AU$615,000.
The tech company claims it will be able to take on the task of re-building the failed etailer, turning it into a profit-making business with only ten employees compared to dstore's previous workforce of 120.
The company plans to deploy a -virtual fulfilment model" which is an integrated platform of functions previously handled manually by staff. It also plans to link electronically with third-party wholesalers.
-Right from the beginning we did the sums and could never understand how etailers like dstore could hope to make money with their cost structure. We now know that they didn't stand a chance because as they sold more stock they had to employ more and more people - a never ending cycle of costs outstripping revenue," HotShed CEO Andrew Cooper said.
HotShed claims that in its first year of operation, dstore will return $200,000 in net profit to the company, "rising to $600,000 in year two and $1.5 million in year three".
