Axe swings after $179m Grays Online buy blows up

It could be the ultimate case of online buyer's remorse.

Grays Online, Australia’s biggest online liquidator and onetime tech clearing house, is itself now on the block for a fire sale, after a $130 million impairment at beleaguered owner, motor finance play Eclipx Group triggered a senior management clean out. 

The ailing fleet business, which had been trying to diversify into digital commerce, revealed it has dispatched veteran chief executive Don Klotz and brought in UBS’ banker Julian Russell to disentangle the cash bleeding ASX business that’s nosedived since choking on the Grays acquisition.

A veteran of the enterprise tech and asset disposal landscape, Grays was snapped-up by Eclipx for $179 million with the hope of using its online reach into the auto market to turbocharge vehicle financing sales.

But the acquisition soon blew-up after an exodus of Grays’ senior staff who were reportedly fed-up with attempts to convert the once thriving B2B auctioneer and liquidator into a car loan and lease factory.

Grays Online had been one of the resounding success stories of Australian companies staying ahead of digital curve balls by successfully surfing the big waves of tech investment and divestment.

Having started out as a physical auctioneer and liquidator – ironically specialising in corporate car wrecks – the company quickly carved out a lucrative niche flogging-off ex-government and corporate computers when a second hand desktop was still worth more than scrap.

In a feat of remarkable prescience, Grays shocked buyers when it then folded its computer and IT resale business and the went head to head with the likes of eBay to resell everything from surplus wines to consumer electronics and appliance retailer over stock online, specialising in plant and industrials.

The shift by Grays out of second-hand computer fleet is widely regarded as the inflection point in Australia when superseded tech gear went from being an asset on the corporate ledger to a liability.

These days it's scrap metal merchants that decommission data centres that run the corporate cloud.

A core strength of Grays was its uncanny knack of being able to blend real-time online bidding for physical auctions with pure online stock clearances without the clutter and cheap tricks rife once on eBay and its local online flea market brand Gumtree.

While Grays thrived to the point it became an acquisition target, its new vehicle-focused owners appeared to have a very different digital sales strategy to drive the business that is understood to have collided heavily with Grays’ ruggedised tech and online execution.

Part of that is understood to have been a push to lower costs and send tech development work out rather than retaining long term in-house IT expertise.

The question now begs who’s left at Grays and who might want to pick it up as a going concern for a price tag that will likely have to be heavily discounted to make the once leading liquidator a compelling buy.

While the marketplace for mainstream online commerce platforms remains saturated – think Coles going Uber Eats – it’s a different story for best of breed specialists that know how to market ex-army Unimogs or the contents of belly-up barbeque joints and soured microbreweries.

Our favourite item currently listed on Grays are a set of vintage deco-style pub doors languishing in a cellar somewhere that espouse the need for ‘neat casual’ dress that lovingly demonstrate not every ambitious acquisition and refit goes to plan.