Ellies ends journey from pioneering electronics giant to business failure
Founded by Ellie Salkow in 1979, Ellies began as a modest operation in Johannesburg with just five employees selling television aerials before quickly expanding its footprint, opening branches in major cities across South Africa and even extending into neighbouring countries.
In the 1990s, Ellies diversified its product offerings to include remote controls and various accessories.
The launch of Elsat in 1995, coinciding with the rise of satellite TV in South Africa, turned Ellies into a household name as DSTV swept through the country’s suburbs.
This accelerated growth trajectory saw it listed on the Johannesburg Stock Exchange’s (JSE) Alternative Exchange in 2007, and it moved to the main board in 2010.
At its peak in 2013, Ellies' share price soared to R9.50, driven by investor excitement over its involvement in the digital terrestrial television (DTT) roll-out in partnership with Altech UEC.
Challenges and decline
However, the company’s fortunes began to wane as the South African government struggled with the DTT migration, and Ellies’ share price plummeted by 80% between 2013 and 2014.
The advent of load-shedding presented an opportunity for Ellies to pivot to alternative energy solutions, leveraging its brand association with electrical accessories. Despite this, the company failed to execute this strategy effectively.
The final blow came with a failed attempt to acquire Bundu Power in 2023, a deal that was meant to revitalise the company through a focus on alternative energy products. The acquisition fell through due to the inability to secure necessary funding, leading to Ellies’ decision to enter voluntary business rescue on 31 January 2024. The business rescue process revealed that there was no reasonable prospect of saving Ellies Holdings, resulting in the company’s liquidation announcement in April 2024. Staff were offered voluntary retrenchment packages, although these were viewed as coercive by many, and all remaining employees were let go by July 2024. SMD Technologies acquired the Ellies brand and intellectual property, but not its operating divisions, marking a sombre end to the once-thriving company. Ellies’ failure has significant implications for the South African tech landscape, particularly for companies reliant on Ellies hardware for distribution. In an interview with Bizcommunity at Africa Tech Week 2024, Sentech CEO Tebogo Leshope discussed how Ellies’ insolvency has affected their operations and alluded to the possibility of Sentech starting a joint venture to manufacture DTT hardware. He highlighted the importance of adapting to changing market dynamics and consumer behaviours, especially as the shift towards digital platforms continues. “As a signal distributor, you're looking at it end to end. For this household to be able to receive a signal, they will need this many devices,” he explained. Despite Ellies’ closure, the acquisition by SMD Technologies aims to revitalise the brand. SMD’s innovative approach and robust distribution network are expected to uphold the Ellies legacy while introducing new products to meet evolving consumer needs.Business rescue and liquidation
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