In yet another blow for the turbulent distribution sector, mobile computing and data connectivity distributor A2000 Distribution has closed its doors.
The Surrey-based firm ceased trading on 2 October, with a creditors' meeting scheduled for this Wednesday to place the company into liquidation.
Paul Ellison, insolvency practitioner from chartered accountancy firm Hurst Morrison Thomson, which is handling the liquidation, said: "Underlying difficult market conditions and products being sold at a lower price by some competitors contributed to a deteriorating turnover [at A2000]."
The firm is the latest distributor to be affected by adverse market conditions.
Specialist distributor Wireless Distribution ceased trading last month, citing difficulties in developing close vendor relationships. Consolidation has also intensified due to several recent acquisitions.
These include Computer 2000 buying Azlan, InTechnology snapping up Allasso, and most recently Westcoast chairman Joe Hemani taking the reins at pan-European distributor Actebis, with the intention of buying the firm by the end of the year.
Steve Muttram, managing director of mobility distributor Portable, said: "We are sorry to hear about the problems at A2000. Its strategy seems to have been focused around the PDA environment, and this space has been a tough one outside the retail sector over the past year."
Nitin Joshi, partner at insolvency specialist PKF, said: "The fact A2000 was a niche player makes this more surprising, but it is part of a general decline in the mobile marketplace, where prices are falling, as are margins.
"The spotlight is firmly on distribution and the shifts are on a pan-European scale. The funnel is getting narrower and only the fittest will emerge.
"However, with some forecasters predicting a surge in corporate spend for 2004, we need to make sure that enough distributors exist to service the anticipated demand."
John Kemp, managing director of A2000, said: "It is very sad. We built up a good team and were due to celebrate 10 years in business in March. It is such a difficult market and the grey importing that is going on seems uncontrollable. There was no way we could compete on price."
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