TodayTech faces liquidation

Australian distributor and white-box builder, TodayTech has called in the administrators after 20 years of business in the IT industry.

Robert Whitton, director of William Buck Chartered Accountants was appointed as the administrator by the distributor's directors on October 7.

He told CRN putting the company into "liquidation" in about a week would be the "most likely outcome" for TodayTech.

"At this stage there's about 50 creditors," said Whitton.

"It's my opinion that trade creditors won't get all their pay. Only one secured creditor and 35 employees will get paid."

Whitton said there were a number of factors that contributed to TodayTech's situation.

"Competition in the industry has impacted on margins," he said. "The business has declined over the past year and it was once a very significant player in the industry."

He said he wasn't sure of what the "projected turnover for the company was in 2010", but the
directors had "done the right thing" in bringing the company to an end, before it "became out of control".

"There's a lot of problems for manufacturers in the industry," claimed Whitton. "Companies like TodayTech are being out-competed by the likes of Dell and Lenovo."

Meng-Wai Koh, co-owner of independent retailer  PC Market agreed with Whitton saying one of the reasons the distie faced problems was because the local whitebox market was slowly dying off.

Koh said PC Market had used TodayTech as a distributor on and off for the past few years. 

"A lot of consumers are buying off the shelf products, unless you're building a gaming machine and need specific gaming parts," he said.

"I think it's starting to hit the smaller distributors because resellers aren't buying PC parts in high volume."

Koh claimed the price drop in notebooks and popularity of netbooks have also impacted on the white-box market.

"Those that saw this coming transitioned towards the hardware mobility market earlier on," he said.

Michael Chong general manager at national distributor Altech told CRN he believed the global financial crisis had taken the distributor by surprise. 

The crisis lowered margins in component products, he said. 

Chong was once the director of sales at TodayTech, having worked there for just over 11 years.

"I was very sad and disappointed about the news," said Chong. "About 90 percent of our Intel stock had come from the distie."

TodayTech also lost both Intel (a partner since 1998) and Western Digital as vendor partners in July this year.

The distributor was founded in Sydney in 1990 by Jack Zhong as a reseller, then moved into PC assembly.

It had offices in Queensland, South Australia, Victoria and Western Australia and vendor partners including Samsung, AOC, Canon, Chenbro, Phillips LCDs and MSI.