Mitek quits distribution for wholesale IT market
Firm set to restructure business as margins become "low and unsustainable"
Second-tier distributor Mitek Computer Components is getting out of distribution and rebranding its business as a wholesale supplier of IT equipment, components and electronics.
The Staffordshire-based firm, which entered a Company Voluntary Arrangement (CVA) earlier this month (CRN, 10 October) also operates its own components manufacturing business known as Optronix.
As a result of its restructure, both resellers and other customers will be able to visit the firm’s showroom and buy goods in bulk over the counter.
Malcolm Roach, Mitek Group managing director, told CRN: “The CVA was approved by 99.2 per cent of our creditors and I’m extremely grateful to the tier-one distributors for giving us the opportunity to continue with our restructure.
“We cannot continue in distribution because the margin is so low and it is not sustainable. We have the facility, people and connections and we will continue to purchase from supporting distributiors and manufacturers. We had to restructure the business in a new direction.
“Our Optronix brand is developing very successfully and that, combined with a wholesale model of Optronix and third party products, is the right way forward.”
Roach told CRN the firm intends to come out of the CVA “as quickly as possible” and is recruiting for a new managing director for Mitek and a sales director for Optronix.
Nitin Joshi, director at accountancy firm Vantis, which acted as the nominee for the CVA, said Mitek should be used as an example to other firms in a similar situation.
“I think there needs to be more CVAs in the channel. Many firms tend to be steered towards the administration or liquidation path, but in some instances a CVA is the best way forward, particularly from a creditors’ point of view because they will get a return, and also have the possibility of ongoing business,” he said.
Phil James, commercial controller at Computer 2000, one of Mitek’s main cr editors, said: “As a company we are happy to support the CVA.”