Western Systems admits defeat in battle for margin

PC vendor Western Systems (Europe) has gone into receivership with estimated debts of around u2 million.

The Ruislip-based assembler has seen turnover fall over the past three years as it battled to keep pace with the larger PC manufacturers. Receiver Steve Hancock of Price Waterhouse said that Western Systems had been hit by the combined effect of pressure on margins and loss of volumes.

Hancock said he was confident that Western Systems would be sold as a going concern. The business would be advertised for sale in the press, and creditors would be contacted to give them details of any planned sale, he said.

Western Systems was formed out of distributor Cal-Abco, and direct PC vendor Western Systems in 1993. Cal-Abco was formerly the original UK distributor for Packard Bell.

Western Systems' last published accounts - for 1994 - show a u21.3 million turnover and a u1.275 million loss. In 1993 sales were around u30 million.

Hancock said that turnover was currently down to around u10 million.

Western Systems now employs 55 staff, which is half the number that it had in 1994.

Romtec analyst Chris Herbert said that the situation at Western Systems showed the problems of direct sellers trying to maintain margin.

Since their peak of three years ago, the number of direct PC sellers in the UK has fallen from 190 to 130. Herbert said that the only direct sellers with good margins were those with long-established accounts with major companies.