Administrators seek buyer for fallen AJ Electronics

After 28 years in business, electronics specialist succumbs to savage consumer spending environment

Administrators are seeking a buyer for AJ Electronics after the 28-year veteran of the electronics goods channel hit the wall.

Founded in 1984, Edgware Road-based AJ Electronics specialises in the retail, wholesale and export and import of electrical goods including LCD screens and computer accessories.

It entered administration last week after the high street slowdown forced it to cease trading.

Joint administrators Alexander Kinninmonth and Duncan Beat of RSM Tenon confirmed they are "currently liaising with interested parties" regarding the sale of the firm's goodwill and tangible assets.

The past few months have seen several large bricks-and-mortar players go to the wall, including Sony store operators Sonex and Headsun and Bascam. Gaming retail kingpin Game Group is also struggling for survival.

Kinninmonth said: "Corporate insolvencies in the retail sector are on the increase and the impact of the internet and online shopping continues to have a significant impact on turnover."

AJ Electronics director Ajay Jobanputra said the firm had been hit by falling turnover and margins brought about by the current economic climate. For the year to 31 December 2010, the firm's turnover fell from £24m to £22.2m year on year, as pre-tax profit shrank from £317,000 to £59,000.

Nitin Joshi, founder of ChannelMoney, said it was a "sad day" for a company that has been a "seminal independent dealer" for the best part of three decades.

Joshi said the firm was hit not only by the savage consumer spending backdrop but also by the eurozone crisis, stressing that 80 per cent of the firm's sales came from exports to Europe and beyond.

"Ajay has an enormous following and an enviable reputation. He is unarguably one of the sector's most respected and ethically minded operators," Joshi said. "The company's collapse is largely down to downward-spiralling margins and the ongoing economic woes in the eurozone. Many of us would like to see Ajay up and running again and I hope his exit is temporary."