Accepting the reality there was "no future for the business" BMS Technology directors, John and Beverley Reid made the agonising decision to enter into voluntary administration.
The Adelaide-based hardware distributor had been operating for 31 years and expanded into office and warehouse facilities in Perth and Melbourne. Peter Macks and Ian Burford of Macks Advisory were appointed as joint administrators to the business on 10 October.
John Reid said in a statement from the administrators that the company had gone from not making a profit to making losses. Closing the business at this time was a hopeful step in making sure that it was able to cover its debts and give employees a better chance of finding new jobs before Christmas.
“Despite everyone’s best efforts there just hadn’t been enough sales to cover costs,” the administrators said in a statement. “The economy was such that sales were getting harder and harder to find."
“The staff have been the backbone of the company, so the first priority was to ensure they had the best possible options. The voluntary administration process is not something they have entered into lightly.”
Speaking to ARN, Anthony Szabo, who had been with the hardware distributor since 1987 and has been the general manager since 2000, said as of July this year, there was a significant slowdown in sales in South Australia and Western Australia.
“We look at our finances on a month-to-month basis and make sure it’s all ticking along, but we were hitting some losses in those three months, so John and Bev decided that if they kept on going, they could’ve potentially been okay, but we didn’t see that sales were going to be picking up in the next six to 12 months,” Szabo said.
“We believe we can sort out all the staff and their entitlements as well as creditors.”
The family-run business, which began in 1986, had a total of 15 employees. Szabo said he had been in contact with a few distributors, but is still deciding if he’ll stay within the IT industry.
“We had a lot of good times, particularly when we used to run our yearly trade show events,” he said. “Our staff have been working with us for a long time and we’ve been a family.”
The first creditors' meeting will be held on 19 October. Administrator, Peter Macks, revealed that it was talking to a number of parties who expressed interest in the BMS business, which distributed products such as Toshiba notebooks and accessories, Netgear, Eaton, Kyocera and its own-branded BMSTECH line featuring data cabinets, racks and cabling products.
BMS also touted itself as the only Australian Toshiba distributor that was also a Toshiba Premier Authorised Service provider, meaning that resellers could deal with one company for their notebook upgrades, configuration work, warranty and repairs.
Leader Computers managing director, Theo Kristoris, confirmed it was looking into BMS’ assets but was still waiting on news from administrators.