UPDATED: End of the line for Tecksel

Industry sources have claimed a fallout between Tecksel and its key vendor partner, Netgear, was a major contributor behind the NSW distributor's recent demise.

The company shut its doors and appointed insolvency firm, Star Dean-Willcocks, as voluntary administrators on July 2. The news came a week after Tecksel shut its Brisbane office. The administrators refused to comment further on creditors or the administration process. A creditors' meeting was due to be held this week but no details were available at the time of writing.

According to sources close to the distributor, Netgear issued Tecksel with a 90-day termination agreement on April 2. The companies had been working together for 10 years.

A source said Netgear had asked Tecksel to continue selling its products through a sub-distribution agreement with Synnex. Netgear had not responded to requests for comment at time of press.

Tecksel was established as an IT distributor in 1996 by Niels and Mark Kofahl but was sold to current managing director, Leigh Mutimer, in 2005. Mark Kofahl said he had not been involved with day-to-day management since late 2004 and had joined his wife's Web application business, Solutions Outsourced. Niels Kofahl has since retired.

Both said they were "stunned and saddened" by Tecksel's closure.

Mutimer told ARN that rapidly declining margins over the last three years on commodity lines had placed increasing pressure on its bottom line.

"We had exceptional support from certain vendors including Powerware, Brother and Level One," he said. "However, the distributor/vendor relationship needs to be a win-win situation and some vendors have lost sight of this over the years.

"Ultimately, there is little room now for a 'value-added distributor' as price is king and resellers cannot afford to pay a premium for service. The need for a company like ours has diminished with the reliability on the Internet for product information and best price availability.

"I am grateful to the many resellers who have supported us and to staff who worked tirelessly for little reward in an industry of declining margins."

One Tecksel reseller, who asked not to be named, said the writing was on the wall after the company downsized its warehouse and relocated from Silverwater to Arndell Park a couple of years ago.