Misco UK has become the latest computer reseller to be plunged into administration following a cashflow crisis and an application for a winding up order from HMRC over unpaid VAT.
The 22-year-old computer reseller has laid off around 300 of its 330 staff, with around 30 retained by the administrators purely to help wind up the company and sell-off stocks.
The company went under just seven months after US parent company Systemax sold off most of its European operations to a management buyout in March this year. That buyout had been supported by private equity firm Hilco Capital.
But Misco UK's cash flow was severely affected by a tightening of credit insurance terms, post-MBO, and a last-ditch attempt to sell-on the UK operations to US reseller PCM in a pre-pack administration were scuppered this week by HMRC's refusal to agree a payment schedule for unpaid VAT.
CEO Alan Cantwell told V3's sister publication, Computer Reseller News, that he didn't have any choice but to file for administration.
"The cashflow issues were brought about predominantly by credit insurers reducing credit limits and HMRC deciding that the informal [payment] agreement didn't work for them and forcing our hand onto a payment," he told CRN. "The two combined just meant we had no choice but to put the company into administration.
"It is a horrible situation. The discussions [with PCM] unfortunately didn't come to fruition. I wish everyone the best of luck."
Misco UK was part of Misco Europe and subsidiaries in Italy, Spain, the Netherlands and Sweden will continue to trade.
Out of work staff shouldn't be left out of pocket, though: the company's founders have paid-up wages to the end of today and the company's competitors, meanwhile, haven't been slow to invite laid-off staff to apply for jobs with them. Ebuyer, for example, tweeted: "To the 300 people affected by #Misco. We are recruiting and sure we could help some of those affected by todays news."
Mike Norris, the long-running CEO of Misco UK's rival Computacenter, described the company's failure as "an isolated incident".
He continued: "In general resellers are doing pretty well at the moment. If you're struggling at the moment you need to look in the mirror…
"One thing it does say about the industry is the importance of being well-financed as an organisation. You don't want some debt-laden business in this industry because it's growing quite fast at the moment. A strong balance sheet is going to help you. But this is a bit like saying today is Thursday - it's not exactly news."
Phil Doye, founder of reseller Kelway, suggested that the company had failed to adapt to a changing business and IT environment. "If you can't or won't evolve (or get wrong people trying [to evolve]) it's stupid, not sad," he tweeted.
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