Crown's jewels tarnished over shock admin seizure

Majority of staff made redundant as administration takes Crown suppliers by surprise.

Vendors and distributors were picking over the remains of Crownsuppliers by surprise. Computer Products following its sudden fall into administration, which stemmed from confusion over its contract with Vtech Holdings.

On 5 January, 80 out of 93 staff were made redundant from Crown, a trading name for BasCrown, and the reseller was handed over to court-appointed administrators Leonard Curtis and Partners. The administrators cited 'fierce competition in the PC market' for its failure.

However, Malcolm Jamieson, Crown managing director, quoted the breakdown of its exclusive distribution agreement with Vtech Holdings as a factor behind the company's demise.

Speaking exclusively to PC Dealer, Jamieson said Crown had signed a sole supply rights in 1992 for Vtech's products. However, when Vtech sold off its manufacturing operation and system distribution arm in June 1997 to PC Partners, the contract, according to Jamieson, was thrown into turmoil.

Jamieson said: 'We had large credit lines which were affected by this so the situation ended up as potential litigation on the grounds of breach of contract.' He added: 'When we found out, we were making arrangements for next season and this has had a major bearing on the situation.'

Christopher Fisher, company secretary at Vtech Electronics UK, a wholly owned subsidiary of the Japanese company, said: 'Selling off the division had nothing to do with it - that is totally irrelevant.'

Alan Thompson, PC director of Toshiba, one of 80 trade creditors, was shocked by the developments. 'We had been accepting return goods, which we don't normally do, and we had begun to reduced credit lines in December,' he said.

Other companies affected by the demise of Crown included CHS Electronics, which is trying to recover #160,000 of debt, while Ideal was hit by a #64,000 debt.

Andy Gass, Computer 2000 director, said: 'We have had issues with Crown throughout our 10-year relationship, but nothing specific. This was a shock.'

'We were paid on the nail at the end of December, but we will make some retention of stock which is still on the premises,' said Gass.

Paul Keely, manager at Leonard Curtis and Partners, said that Crown was already on the market, adding: 'We have a number of interested parties who have inquired about buying Crown - it will be open to offers.'