During the ups and downs of consolidation and price wars within the IT industry and its channels, there were ultimately winners (receivers Pannell Kerr Forster and KPMG certainly up there among them) and losers. Here's a brief look at those that will not be joining us in the millennium.
CHS Electronics Plc UK:
The ultimate fate of CHS Electronics' UK operation marked the nadir for a channel that had been riddled with the insecurity of price wars, close-to-zero margins, and receivership over the last 12 months as CHS Electronics Plc UK was plunged into receivership on 22 October by Deutsche Financial Services, after notching up debts of about £17 million and violating the banks's credit facility. The CHS Electronics ledger was later sold to Northamber, Computacenter took over its Metrologie unit, and there has been a UK MBO at components arm Karma UK.
Compaq Reseller and consultancy Text Systems put its two holding companies into receivership in July, to facilitate a management buyout and rid itself of debt. Text Systems Holdings, the holding company of the trading firm, and its owner Text Systems Group, were wound up and in their place, Text Systems Solutions was established by the MBO team, following the purchase of the trading company from its previous majority owner, the Royal Bank of Scotland.
Controversial PC Science, the North Yorkshire desktop manufacturer and its managing director Charles Forsyth, were an eventual victim to administrative receivership in July, after starting the year rather more promisingly with a contract to supply Asda in March. Then it all began to go horribly wrong. The company had its wrists slapped by the Advertising Standards Authority (ASA) over a national press campaign, lost its contract to supply Argos with hardware and started a lawsuit against motherboards supplier Protac over the compatibility of its product. Then Trading Standards Officers started looking into the manufacturer when customer complaints soared to over 400. The Office of Fair Trading (OFT) also became involved, looking at reviewing the vendor's credit licence. Receivers KPMG topped it all off when it entered the hardware vendor's premises near York.
Actinet Computers, the Telford dealer and systems builder, went into administration, as the shakeout of small and medium PC assemblers continued apace. It went into receivership with unsecured debts totalling £716,612, after creditors issued a petition on 10 May, legally obliging the dealer's bank, Barclays, to freeze its account. According to administrators Pannell Kerr Forster, Actinet tried to diversify into the corporate market and training, but left it half a year too late, as its customers started buying from big warehouses and mail-order operations.
Osmosis' battle to stay in business finally ended after the distributor's directors applied to the High Court and Pannell Kerr Forster was appointed as administrator on 13 May. Osmosis' drip-drip approach to winding up started following its withdrawal from the hardware PC business at the end of April with sources suggested the company's debt was between £4 million and £5 million. The withdrawal was just as well, because it stood to lose its Microsoft Delivery Solution Provider status from 31 May when its contract ran out.
Widnes distributor Memsolve hit receivership with debts of up to £5 million, following weeks of speculation over its future. BDO Stoy Hayward was appointed administrative receiver to the distributor on 11 February. The move followed NatWest's removal of credit and the departure of company director Rob Swire at the end of January. Prior to receivership, Memsolve was also subject to a VAT fraud inquiry by HM Customs & Excise, which continued despite the arrival of receivers at Memsolve.
Olivetti Computers Worldwide:
The Italian operation of troubled Olivetti Computers Worldwide (OCW) filed for bankruptcy in March, bringing the UK channel's supply of PCs and servers to a halt, after production was suspended. OCW's Italian arm, OP Computers, was forced out from under court protection after an MBO deal was aborted.
PMC Group and PMC Electronics, the manufacturers of Pace modems, fell into administrative receivership when KPMG was appointed as receiver on 5 August.
A NEAR MISS:
P&I Data Services:
P&I Data Services had a company's voluntary arrangement (CVA) accepted by its creditors after it applied for it in July after notching up debts of £1.7 million. The CVA was increased from three to five years, and according to final modifications to the agreement, the board is barred from incorporating a new company or business, or being involved in the management of another business for the duration of the CVA. Monthly payments are to be made by the company to pay off creditors, as agreed by supervisors from chartered accountants Baker Tilly and administrators Pannell Kerr Forster.
Yeah, sorry about all that, simpers Zuckerberg
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