Reseller bodycount remains near nine-year high

89 UK channel firms bit the dust in the first quarter of 2012, according to Graydon UK

The number of UK channel insolvencies remained at a near nine-year high in the first quarter of 2012, according to credit reference agency Graydon UK.

Some 89 resellers hit the wall in the first three months of the year, compared with 88 in the previous quarter and 76 in Q1 of 2011.

Last year, 356 resellers went down the tube, the highest number since 2002, when 413 firms bit the dust, Graydon data reveals.

Of the 89 casualties, 18 were compulsory liquidations, 25 were receiver appointed and 46 were voluntary liquidations.

Recent high-profile casualties include consumer electronics specialist AJ Electronics, which hit the wall in March after nearly 28 years in business.

Eddie Pacey, managing director at EP Credit Management & Consultancy, said: "I think that 2012 will be even tougher than 2011, simply because of the banks and the changes to business models. Moving to managed services is very hard if you have been around for 10 years."

Pacey said he feared the most for small to mid-sized resellers.

"Many are wary of bigger customers and give them more time to pay," he said. "But no business these days can afford to sit back and not collect. This is the downfall for lots of small to mid-sized resellers as they don't tend to employ anyone to do that job."