Integrity expansion ends in administration

Integrity expansion ends in administration

Specialist wireless distributor, Integrity Data Systems, has been forced into voluntary administration after attempts to expand nationally ended in failure. The company appointed Sims Partners to act as administrators earlier this month.

CEO and director, Ross Chiswell, blamed the company's aggressive growth strategy as the catalyst for its demise.

"We made expansion plans that didn't come off last financial year," Chiswell said. "We didn't react quickly enough to the monetary losses that came as a result of this decision."

Integrity had invested in a variety of new sales roles, he said, including the appointment of southern and eastern regional sales managers.

At its peak, Chiswell said the distributor had about 16 staff. It currently had six employees.

"We gave people too much time to provide returns and grow the business," he said. "It didn't eventuate, which hurt like hell. It is unfortunate because we were going for 10 years, eight of which had been great. But in the last two, we caused ourselves grief."

Chiswell insisted the decision to go into administration was independent of its recent loss of contracts with wireless vendors, AirMagnet and Bluesocket, who both switched to Firewall Systems last week.

He also rejected the suggestion that the market was not responding to its business model.

Federal Government financial incentives, such as the broadband HIBIS scheme, were giving the market further reasons to adopt wireless technology, Chiswell said. But he admitted people still weren't fully aware of the various wireless technologies available, making it more difficult to sell product.

"I thought the opportunities were there, but we were 12 months too early," he said. "We were too small so we tried to get critical mass, but it had a bad effect."

Integrity's story reflects the same woes experienced by another speciality wireless integrator, Simply Wireless, which went into administration last year. At the time, company director, Desmond O'Geran, attributed its collapse on failing to attract enough capital, as well as a lack of customer understanding about wireless products.

Integrity is still trading under administration.

Chiswell said the distributor had about $500,000 worth of orders it had committed to fulfilling. In addition, outstanding maintenance contracts would be transferred to any prospective buyer as a condition of sale.

The company's administrator, Des Munro, was confident that the business could be sold intact.

"It has a good name in the industry, and we have had good feedback so far," he said. "We want to sell it as quickly as we can so there is no impact on customers."

The first creditor's meeting has already been held. A second is scheduled for October 27. Expressions of interest will close on October 28.

Integrity had about 30 creditors, many of which were overseas suppliers, Munro said.

Chiswell said he hoped a larger national buyer would be able to use its sales force to drive take-up of the company's wireless knowledge. "We felt it would be more sensible in the long term to get a new management team in; one that could bring different skill sets," he said.

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