Memory and storage product distributor Australasian Memory has entered into voluntary administration, as tumbling memory prices and internal reporting problems finally took their toll.
Administrators from Richard Brian and Co took control of the company three weeks ago, and have embarked on a restructure plan. The likely scenario is that the business will be sold. According to managing director Barry Amor at least one contender is now circling the company.
Amor says strife began when internal reporting troubles emerged in mid-1996. This stalled a planned injection of capital, creating an air of nervousness about the company. He has no doubt that, had memory prices not fallen, the company would have dealt with this problem. "One without the other, we would have probably been able to work our way through them."
Amor said Australasian Memory maintained a good relationship with its suppliers, although both Digital and Kingston Technology are believed to be the major creditors.
Kingston appointed Simms International to distribute its entire range late last year, but spokesperson Keith Hamilton said this was not in response to AM's troubles. "We have an excellent relationship with Australasian Memory. We knew exactly what was going on, but that was not our motive at all. We always wanted our customers to have a choice." Simms had previously distributed Kingston's Macintosh products.
Amor said AM had begun a strategy that would have seen it less dependent on memory, involving Storage Tek, Digital and Quantum. "That certainly was an appropriate strategy," said Amor, "and it really would have insulated us from the memory prices falling had we not had other internal reporting problems. But we were not as far down that track as we would have liked to have been."