Victorian-based reseller chain, Computer World, owes more than $4.5 million to secured and unsecured creditors, according to an administrator's report.
External administrator, Andrew Hewitt, was appointed to the company on October 15. According to the initial creditors report, major company creditors include Dicker Data (owed $499,000), Ingram Micro ($494,000) and Cellnet ($364,000). The next creditor's meeting is scheduled for October 22.
In the report, administrators indicated the company's demise related to trading losses and significant theft of stock.
Dicker Data, managing director, David Dicker, said it supplied Computer World with HP and Toshiba branded desktops and notebooks.
"We will end up losing about $50,000, which is obviously painful, but we would not have dealt with them without credit insurance in the first place," he said. "In the overall scheme of things we've probably done alright."
Cellnet managing director, Stephen Harrison, said the Queensland-based distributor had been dealing with Computer World for some time and was insured for the debt.
"It is never a good thing when somebody like that goes into administration but I think it's a sign of the times. Things are fairly tough out there, it's not easy and the margins are being eroded. When you are a retailer you have got to have the right structure and costs in place," Harrison said. "I think that it will send a shock wave through the industry."
Bluechip Infotech sales director, Ron Jarvis, said it was owed about $90,000 by Computer World. Like Dicker and Cellnet, Bluechip was insured to cover such situations.
"They were a large retailer here for at least 10 years," he said. "They had opened up a couple of new stores in Melbourne in the last 18 months, so it is disappointing to hear this."
As previously reported, Multimedia Technology managing director, John Hassall, confirmed it was also a Computer World creditor and was owed about $250,000.
Computer World had four Victorian stores in Dandenong, Richmond, Blackburn, Bundoora and Melbourne, as well as two in NSW. The Dandenong store will continue to trade, but the rest of the stores will stop trading. Adminstrators said the company had 35 staff, 25 of whom had been terminated prior to its appointment.
Company director, Yuvarajah Murugesu, could not be reached for comment at the time going to press.
Murugesu's brother also runs another Victorian reseller, Landmark Computers. Company director, Naran Murugesu, denied it would be affected by Computer World's demise. He declined to comment further on the administration process.