Blames pressure on working capital at time of competition from global online rivals
Misco's UK arm has gone into administration and ceased trading, with the vast majority of the company's 330 staff being made redundant. “Following the receipt of a winding-up petition from HMRC [over unpaid VAT], the company was left no viable option other than to seek the protection of administration,” said the appointed adminstrators.
Misco UK formed part of Misco Europe, which continues to trade with operations in Italy, Spain, Netherlands and Sweden. Those other subsidiaries are not believed to be affected from the UK collapse
Geoff Rowley, Tom MacLennan and John Lowe, partners at FRP Advisory, have been appointed as joint administrators to Misco UK Limited, the UK operation of the computer reseller business headquartered in Wellingborough, Northamptonshire. The firm also has a sales office in Weybridge, Surrey, and a warehouse in Greenock, near Glasgow, Scotland.
Whilst redundancies have been made, around 30 jobs are currently being retained at the Wellingborough headquarters and the Greenock warehouse to assist the joint administrators manage the process of realising the company’s assets in the interests of creditors.
“Despite an effective turnaround plan being in place to improve cash-flow, credit insurers significantly tightened their terms which put further pressure on working capital at a time when competition from other global online retailers began to increase,” the administrators said. “As part of efforts to recapitalise the company, the directors initiated a marketing process [to sell the firm] to protect the UK business as a going concern, and engaged in constructive discussions, but once firm offers failed to materialise the pressure on cash-flow was unsustainable.” the adminstrators added.
It is believed that US reseller PCM had been in negotiations to buy all or part of Misco UK this week, before the firm ceased trading. Earlier this year, to cut costs, Misco UK had closed an office in Watford, Herts and had taken the decision to close the Scottish warehouse.
Geoff Rowley, joint administrator, said: “Misco UK had made great progress since a change of ownership and new investment in March this year, but the company’s turnaround plans could not deal sufficiently with the rapidly deterioration in cash-flow after the sudden tightening of credit insurance terms.”
He said: “The UK business had moved to a system of supply chain outsourcing of stock, with increasing levels of automation to enable greater efficiencies with suppliers and distributors to deliver overall lower costs, however these efforts came at a time of heightened competition from other globalised online retailers, which have eaten heavily into the margins of even established IT resellers like Misco.”