Fallout continues after the collapse last week of Toowoomba distributor QLD IT. According to several industry commentators ARN spoke to, most QLD IT employees have been assimilated into other companies in the region, however the administrator's decision to liquidate an apparently viable company has been met with criticism.
ARN has discovered administrators overseeing the wrap-up of the company rejected two offers which had been made in the attempt to maintain the distribution business intact. Toowoomba businessperson Danny Salzke failed in his attempt to purchase the distribution business and keep it operational, as the administrators pushed through with the liquidation process.
"I had watched the company grow from the outside and it appeared to be a viable business," Salzke said. "I just wanted to keep it operational and keep it local, but the administrators clearly thought it was worth more broken up and sold at auction."
The break up of the company has been met with disappointment, as resellers in Toowoomba search for alternative product sources.
David Humber, owner manager of Computer Solution Centre, is facing a difficult time ahead, having lost his major supplier and an important income source. Humber's company was contracted to fulfill warranty repairs on QLD IT's now defunct Nintaus brand computers.
"We have had to lay off our trainee, because we don't have anything for him to do now," Humber said. "Business is slow at the moment anyway, so this is the last thing we need."
Echoing recent sentiments expressed across the channel, Humber also lamented the break up of the company saying that former QLD IT owner Scott Matthews had assembled a talent team.
"They were always a great company to work with, he had managed to attract some good staff. Luckily most of them have found positions in companies in the area."
Queensland distributor Intermedia Computers has agreed to purchase the QLD IT trading name, goodwill, customer list, intellectual property, domain name and e-commerce software.
Intermedia managing director Ray Shaw told ARN that the company has agreed to fulfil any outstanding warranty claims against QLD IT, providing appropriate documentation can be displayed.
"We have avoided buying the whole company, as there are still too many unknowns," Shaw said. "However, QLD IT had a good relationship with its channel partners and we intend to maintain those relationships."
According to Shaw, resellers will find it is "business as usual", as customers shift from one company to the other. The changeover became effective from December 1, when all communications directed towards QLD IT were redirected to Intermedia's Brisbane offices.
Shaw also confirmed that while he intends to maintain the distributor's customer base, QLD IT's Nintaus brand PCs will be discontinued under Intermedia direction.
"Intermedia is in a unique position to seamlessly honour all existing commitments to customers," Shaw said. "QLD IT's customers will receive the same prices, goods, terms and hopefully even better service from the company."
Shaw also confirmed the QLD IT sales manager Les McLean has agreed to joined Intermedia.
After the fall
Speculation as to the reasons behind the fall of the three-year-old company is rife, with many suggesting a management crisis stemming from the company's recent rapid expansion.
QLD IT founder Scott Matthews had previously been involved in a number of IT channel ventures, including retail businesses OM_Data and Ivastar.
According to QLD IT's Web site, the company had generated $10 million last financial year and had recently moved premises to cope with rapid expansion. While doomsdayers are suggesting the fall of one of the youngest stars of the Australian distribution channel is symptomatic of the health of the IT channel, many in the Toowoomban business community believe the company's failure is the result of management practices.
There is no official statement regarding Matthews' whereabouts, although unconfirmed reports claim he has travelled to Thailand, while others claim he is still in Toowoomba.
QLD IT was placed in the hands of administrators on November 13 after a Commonwealth Bank auditor questioned $400,000 worth of apparently invalid transactions.
At this stage Knights Insolvency Administration, the company appointed to wrap up QLD IT, is refusing to comment on whether more than $3 million of bad debt will be recoverable from the sale of the company's assets.