Misco UK has gone out of business after a last-gasp attempt to sell its assets in a 'pre-pack' failed.
Misco's UK business was plunged into a cashflow crisis after HMRC issued it with a winding-up petition over unpaid VAT and credit insurers moved to reduce their exposure to firm.
Attempts to sell some or all of the assets to US-based rival PCM earlier this week came to nothing, and this morning the firm entered administration and ceased trading, representing the biggest UK channel insolvency since 2e2. Misco's mainland European operations are unaffected.
The vast majority of Misco UK's 330 UK staff have been made redundant, although around 30 jobs are expected to be retained through the administration process, according to the administrator, FRP.
Talking to CRN, Alan Cantwell, stressed that management had persuaded Misco's funders to pay all staff up until today, and said that he hoped "lots and lots" of them would find employment with competitors by the close of business today.
"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 said. "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's UK business had been in the doldrums for several years, with 2015 losses widening from £5.6m to £8.5m.
Long-standing parent company Systemax sold most of the European operations to a MBO-team led by Cantwell and backed by Hilco Capital in March, and since then the new team has hacked £21m out of Misco's cost base at a group level. In the UK, this included closing the Watford office and Scottish warehouse.
In a statement, Geoff Rowley, joint administrator, and partner at FRP Advisory, said: "Misco UK had made great progress since the 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. 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 distributions and overall lower cost, 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."
Rowley added: "Our immediate priority as administrators is to work closely with all agencies and services to ensure employees receive every support and assistance at this time. We shall be assisting those staff who have lost their jobs with their timely applications to the Redundancy Payments Service."
Misco's mainland European operations in Italy, Spain, Netherlands and Sweden will continue to trade as normal, and Cantwell said he and his executive team will be flying out to each of the four countries - as well as its back-office hub in Budapest - tomorrow to reassure staff based there.
"We are going to reassure everyone and make them comfortable that the financial structure of the other group companies is solid," Cantwell said.
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