Optima's troubles concern local industry

An industry source close to Optima has told CRN that Optima’s retail arm, Digital City, has yet to pay “hundreds and thousands of dollars” to Melbourne-based distributor Multimedia Technology.

This comes after Optima had to report a $5.1 million net loss in its half-yearly accounts last December, partially due to the 2007 acquisition of the consumer electronics retailer.

According to an industry source, the company has two options - either get rid of Digital City or let the whole company crash. “The problem is the local market is very competitive and Optima can’t go head to head and fight with multinational hardware vendors. The best option for Optima will be to cut off Digital City. If Ung cuts off the company then it would be a disaster for the local industry,” says the source.

“If Optima can’t get through this then a lot of vendors will lose money and MMT will also lose the money owed to it by Digital City. If Optima can get past its problems then it would represent a good image for the local IT industry overseas. I wish Ung all the best,” says the source.

Marie Evans, channel marketing manager at Trend Micro and former marketing representative at Optima, said the market is tough.

“What concerns me is that if Optima can’t make it then nobody can. A year ago I was concerned because brand names are overtaking and the ‘other commodity’ on a graph is shrinking, making leeway for vendors like Dell and Toshiba,” she said.

According to Evans the market is tough for local companies because government departments are letting down local companies. “Hard working Australians aren’t being given much business. We are a small country and what you find in our whole country, you could fit into a city overseas,” she says.

Evans says she has had numerous calls from channel partners working with Trend and Optima also commenting on the needs for Optima to “ride it through”. “(Chairman and managing director) Ung has always been a dedicated channel supporter. He was always a good operator and knew what his partners wanted. It would be a shame if something bad happens,” she said.

“Players like Intel and Microsoft will also be disappointed if Optima don’t get through this because it was always the local king when it comes to purchasing their products,” she claimed.

Optima has officially halted from trading on the Australian Stock Exchange, pending the release of details regarding the future direction of the hardware company.

In a statement to the ASX, Cornel Ung, chairman and managing director at Optima says “it has taken longer than expected to finalise the direction and we expect an announcement to be made before the opening of trading on 25 July”.
CRN was unable to reach Ung for a comment at the time of the press.

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