Downturn bites into Logitek

Reseller arm is all that remains as receivers called in

Troubled networking distributor Logitek has succumbed to market conditions and is going into voluntary administration, leaving behind only its reseller arm.

Insolvency specialist PKF was appointed administrator last week following a court application from Logitek directors.

Three companies from the Logitek group - Logitek Distribution, Logitek Telecommunications and Langtree Industries - have gone into receivership.

However, VAR Vitec Communications will survive, because it is not part of the insolvency procedure and is still backed by bankers and distributors, said Nitin Joshi, director at PKF.

Logitek joins a host of UK channel firms that have fallen by the wayside this year, including networking distributor Equinox's product distribution arm and components distributor Computer 3000 [CRN, 23 May].

"This latest collapse very much represents the issues in the channel," Joshi said. He added that distribution in the Logitek family no longer had a viable place.

"The directors managed to reduce the liabilities substantially so that only vendors feature as creditors, and the transformation of the group means that Vitec can focus as a value-added reseller," he said.

A total of 32 staff have been made redundant, and the company will continue trading while receivers attempt to sell the business as a going concern, Joshi added.

Robert Adams, director at Logitek, said in a statement: "In any situation, the most regrettable but sadly unavoidable constituent is the need to make redundancies."

Barry Spalton, managing director of reseller Procom, said the announcement had come as a shock.

"I did a lot of business with them each month and a lot of resellers who did business only with [Logitek] will have to find other partners who won't offer the same level of service and support," he said.