Brisbane-based reseller, Concorde Computers, has been forced into voluntary administration after being unable to pay about $1.6 million worth of creditor debt.
A company director, Quentin Stoodley, said Concorde appointed an administrator after failing to reap sufficient revenue from its September-November sales period.
"September and October are always a downtime for us and have been for the past four to five years," he said. "There were no alarm bells to see these figures changing. November however was our worst month in five years."
ARN sources claimed an initial creditors listing showed Concorde owed about $1.6 million in debt to various suppliers and end-users. At the top of the list is a distributor, Tech Pacific, which is owed about $280,000. Other creditors owed more than $100,000 include Backbone Distribution, Ingram Micro, IT Wholesale, Bluechip Infotech and Sony.
The administrators appointed to the company, Horwath Jefferson Stevenson, are now in the process of attracting potential buyers to secure the businesses' future. The company will continue to trade under administration until a decision has been reached.
An assistant to the administrators, Robert Colussi, said the first of two creditors' meetings had been held on December 6 to discuss the future of the business.
A second is slated for January to finalise the level of compensation for those now owed money by the reseller. This will include payments not only to suppliers, but also end-users who have not yet received goods.
So far, Colussi claimed two parties had submitted offers for the Concorde business.
The bidding process closes on December 10.
"If there are no buyers we will be shutting the doors," he said. "The business can't continue as is."
Colussi said the administrators were unable to verify the amount of money owed by Concorde to its creditors as the preliminary figures were based on those recorded on the reseller's books only.
Each creditor must now complete a proof of debt form to realise these amounts, he said.
"Once these are in we will get a better idea on actual figures," he said. "It could differ by a large sum."
Colussi said such figures often rose as the result of the debt forms.
Concorde's primary revenue generator was PC system sales.
Stoodley said increasing competition across the PC reseller market was one of the main catalysts for the demise of the company.
"We've seen the market fall away for our space," he said. "I believe other dealers are experiencing the same thing."
Colussi echoed this, and said many resellers were now undergoing tough times as the result of smaller margins and tougher competition.
"The suppliers are indicating that Concorde is not the only one in trouble," he said. "This is not an isolated incident." Stoodley said the opening of another reseller just two doors away had also hurt its bottom line.
The Computer Alliance was founded by Concorde non-executive shareholder, Jason Puschman.
Stoodley said Concorde has struck a deal with a third-party agent to provide warranty support to all systems now being sold by the reseller. Those warranties issued prior to the appointment of administrators will not be covered.