Misco has shut one of its three UK offices following a financial review by new owner Hilco Capital, but its new CEO says he harbours plans to grow the business.
Talking to CRN, Misco CEO Alan Cantwell confirmed that its Watford branch office closed yesterday.
Several of the 18 staff impacted will relocate to its Wellingborough office or work from home, with the remainder being let go by the reseller.
Cantwell and three other former executives of Selection Services assumed control of Misco (excluding its French arm) in March in a management buy-in backed by Hilco.
Hilco's background lies in restructuring "stressed and distressed" businesses, but Cantwell said he has a remit to "stabilise and build" Misco, working with Hilco's private equity arm.
"My view of Misco is it has been very much an orphaned family member," he said. "I've been watching it for the last two to two-and-a-half years, and have been trying to buy the business. I've been desperate to get hold of it because I can see the opportunity."
Misco has 1,100 staff across Europe, including 350 in the UK, 300 in the Netherlands, and a further 300 in its shared services centre in Budapest.
Cantwell admitted the Budapest hub was built at a time when Misco had visions of being a much bigger business, and confirmed some functions have since moved back to the local countries in recent months and years, including purchasing and customer services in the UK.
"But we are 100 per cent committed to retaining it. It's got some very, very clever people there and it's very cost effective," he said.
As part of the transaction, the new team has committed to replacing the legacy ERP system Budapest uses with a tier-one solution, such as Netsuite or Dynamics, within nine months Cantwell added.
Cantwell also scotched rumours that credit insurers Euler and Atradius moved to withdraw cover following the change in ownership.
"There's no smoke without fire - everyone was caught by surprise," he said. "But neither insurance company has withdrawn cover, and none of our suppliers have withdrawn credit limits. We have spent a lot of time with all of them making sure they have full visibility on the new financial models of the business moving forward."
Misco's UK business made a loss in both 2015 and 2016, and is on course to remain in the red in 2017.
But Cantwell said he could see it being a "very successful" business if it emulates the Dutch operations and develops a meaningful solutions and services business. Although it has built up a 60-strong services and solutions team over the last year, it hasn't been as "productive" as expected, Cantwell indicated.
"They haven't necessarily been given the opportunity to develop a revenue stream yet so we're going to be focusing more on the sales side," said Cantwell, adding that he and his fellow directors all have a background in services.
"The management team - ie the four of us - have invested every spare penny we have into Misco alongside Hilco. We are very, very heavily committed financially," he said.
The Watford office, which was only opened ten months ago and focused solely on Misco's core transactional business, was closed following a financial review by the new owners.
"Financially it just didn't make sense to have a satellite office in Watford. It just wasn't making any money and it wasn't well thought out," Cantwell said.
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