Future of Misco UK hangs in the balance – sources

Misco Group Ltd is holding eleventh-hour talks to secure additional funding to turn around the business and stave off the threat of administrative receivership, multiple sources have told The Reg. The majority of Misco’s European operations were sold to IT industry exec Alan Cantwell backed by Hilco Capital – the private …

[Anonymous Coward]

Advice to staff

Having been through a corporate insolvency, I have some advice for Misco employees: Get out as fast as you can. Loyalty will not be rewarded even if the company does avoid administration, unless you're a senior manager with a "key man" retention bonus, in writing.

If it does go to administration then most staff will probably get the bullet on statutory minimum (if there's even the cash to pay that), and retention bonuses probably won't be paid by any new owner, because they'll bundle up all the liabilities to do a pre-pack insolvency (any buyer will verbally promise fair treatment, but that means fair to them, not to employees). Any pension fund deficit will be a creditor to the old Misco, so that won't get paid, as will any owed-but-unpaid salaries, bonuses, or contractor fees.

Run away! Run away!

[Come to the Dark Side]

Re: Advice to staff

Statutory redundancy pay is paid by the government in the event that the administrators cannot (also covers some other entitlements such as accrued holiday pay, etc), up to a certain limit.

[Roland6]

Re: Advice to staff

"Having been through a corporate insolvency, I have some advice for Misco employees: Get out as fast as you can."

Given how long things have been going on, you've probably left it too late to not be adversely impacted.

I would anticipate the company has in at least the current financial year and if not the previous year:

1. Not paid NI contributions to HMRC (but will have deducted them from your pay).

2. Not paid contributions into your pension scheme.

The absence of NI payments will directly impact your entitlement to state benefits - such as Statutory redundancy pay - and will also mean the months when you thought you were paying NI but weren't, do not count towards your state pension entitlement.

The missing payments into your pension scheme, will have a varying impact:

1. If it is a defined benefits scheme, well the scheme will be even more underfunded than it probably already is - there is a government-backed scheme that may help to cover this shortfall.

2. If it is defined contribution scheme, you've lost a few months contributions.

3. If you have payroll deducted FSAVCs then you've probably also lost these contributions.

By joining the queue of creditors you might be able to recover some of these monies down-the-road, but given the odds against recovery, I would treat any monies recovered as a lottery prize.

Word to those not about to be made redundant: Do your FSAVCs as direct debits from your bank account as that way you know if they have or have not been paid and whether tax rebates from HMRC have or have not happened.

As for PAYE, just as long as you have your payslips showing tax has been deducted, HMRC will not ask you for the unpaid tax...

[Anonymous Coward]

Re: Advice to staff

Given how long things have been going on, you've probably left it too late to not be adversely impacted.

You're right, and many will have seen the writing on the wall and gone already. But my comment was aimed at those who are still there, either because they didn't see that writing, inertia, or a misguided hope that it will all come good in the end. Even now, some poor herberts will be working hard to try and save a business that they don't own, and they'll be so wrapped up in manning the pumps, that they won't be thinking logically, or looking after their own interests.

[anothercynic]

Re: Advice to staff

Seconded. Start looking for something *NOW* before the Christmas closures and the inevitable mess that follows (see Comet and Woolworths administrations plus several others that happened just before Christmas). It's October now, by end of November you might have something.

[Anonymous Coward]

I wonder....

If all those catalogues will one day become collectors items. A bit like old Tandy (Radio Shack) catalogues.

Maybe I shouldn't have filed so many of them in the round receptacle in the corner....

Buy one printer cable, receive weekly catalogues for the next 10 years.

[katrinab]

Re: I wonder....

Buy another cable, get two weekly catalogues for the next 10 years.

They had targets for "second name capture", I believe it was 80% of orders, and the only way to achieve that was to make names up. But the marketing manager seemed to think that if you sent out 50 copies of the catalogue to a customer, you would get more order than if you sent out 25 of them. That's probably why they've gone bust.

[Terry 6]

Re: I wonder....

Or they could be going bust because for years they offered expensive, but low spec, kit to small retail and SOHO buyers who bought because they were convenient - a job now done by Amazon, or even Curry's.

[rmason]

Re: I wonder....

I can second this, an raise you somewhat.

For a period here (pre this ownership) our company had a massive IT staff turnover in management and sysadmin type roles. Both temps and permies.

Like most places *something* was purchased form misco. We get no fewer than 6-10 copies of their spam with various folks names on and a further 2-3 with variations of "IT MANAGER" on. there isn't even any consistency regarding how many come. Some weeks it's 5, others as high as 10.

I know they're made form the thinnest paper known to man, but they are still designed, content created and added, physically printed and posted to people. I can't imagine we are alone. Another old place got 4-5 a week too.

£££££££

[Hans Neeson-Bumpsadese]

Re: I wonder....

I think the only company worse than Misco when it came to sending out catalogues was Inmac. Hardly ever bought anything from either company, but I got more mail from them than from anyone else.

[Dale 3]

Re: I wonder....

CPC are pretty good at sending a multitude of thick catalogues, most of which are more or less identical from one week to the next.

Bolsover Cruise Club are incredible. You don't even need to have gone on a cruise, you just need to have walked past their shop or something and you'll be on the receiving end of all manner of letters, postcards and booklets, multiple times per week.

[Anonymous Coward]

Re: I wonder....

I used to get the CPC 'Big Book' a directory of their products the size of the london telephone book in it's peak.

I emailed them once to say how expensive that must be and bad for the environment when all these products could be found online. I recommended they ask their customers whether they still wanted to receive the big book or not and so reduce the amount they send out.

Never got a reply and they kept sending them every year, they may have stopped now.

[Aitor 1]

Pricing

I dont understand how could they stay in business. I had a shop more than 20 years ago and I found them to be extremely expensive... yet NOW they are going bust?

[Anonymous Coward]

Re: Pricing

They were cheap - if you had a corporate account and corporate discount. It took me 30 seconds to get a discount level higher than we should have had with them in the company I was standing in for an IT director 16 years ago. The conversation went like that:

Me: Do you know X?

Misco: Yes, they are our competitor.

Me: Cool. I fired them last week. Do you know Y?

Misco: Yes, they are also our competitor.

Me: Cool. I fired them yesterday because they tried to play silly buggers with pricing. You get an exclusive deal if you do not play silly buggers - I am expecting to get the best discount you can organize, if you do not, you will last 30 second after I have found and will be replaced by someone else. Capice?

They lasted for 5 years and the pricing was beyond excellent. 5 years later around 2007 their best sales and account management staff left and moved to Computacenter. While they did not "take" their accounts with them, most people who were using Misco moved there too. From there onwards Misco never managed to recover.

[Anonymous Coward]

Re: Pricing

We used to do all our business for IT kit through them. Then they started being really awkward and difficult about 7 years ago. We stopped using them and moved exclusively to someone else who also couldn't deal with a very big order properly so we moved again and have stayed with that supplier ever since.

As I always say, I will stay with a supplier and not consider anyone else as long as they remain good and their prices are reasonable (I don't even need the lowest price as I understand the margins are tight and I want the supplier to not get disgruntled that they just lose money on us).

In IT as you change jobs you often take your supplier with you, screw your customers over and they'll never use you again - in any job they move to.

[K]

Re: Pricing

"I will stay with a supplier and not consider anyone"

If only you suppliers knew the power of the dark BoFH side.

I've got 1 small supplier I started using when I worked at an SME, they were honest and understood how to work with an IT manager, when budgets were tight they worked miracles with the vendors for me.. since then I've moved up, now working in FTSE companies, and taken this supplier with me, and rather £5000-£15000 orders, they now get £500k.

I still remember 1 new underhanded supplier, who I was discussing Microsoft licensing with, I won't name them (they are named after something toddlers/kids Colour with), they were about £50 cheaper than my usual supplier and something stank about them, so I decided to stick with the devil I knew - next thing I know, the underhanded supplier was on the phone to call my head of finance!

[Captain Scarlet]

Blast it

Well I for one much prefer Misco to other resellers, yes they cost more but our account managers have always helped us out and dealt with any issues we have (Which includes me ordering wrong items).

There is very little they couldn't get ordered for us where as other suppliers have refused to even look to see if they could get items not on their books.

[Lee D]

Re: Blast it

You must deal with some really crappy suppliers then.

WStore are the people who CC:d my boss calling him a idiot on an internal email. They lost tens of thousands of pounds of annual business just by not having a proper CRM program.

But basically from there, the world is divided into "we only stock X" and "we stock nothing in particular and everything you can imagine - what do you want?" companies. The problem I have with that is that there's no knowledge or investment with selling other people's stuff whether you're gold-partner or whatever other nonsense they took an online test to get.

I bought IBM (was still IBM at the time, now Lenovo) server kit from a reseller. I then found another reseller when that one couldn't work out simple things like "I have it in writing, on the quote, the purchase order and the invoice, and in several emails, the fact that I don't have the thing I ordered is your mess-up for mis-quoting, not my mess-up for insisting I get what I ordered" (to the point of legal threats and having their financial directors visit my workplace to argue it, where I pulled out all the emails and paperwork that they could have found in 10 seconds if they'd bothered). Since then, I've moved from them to another because they changed staff and became junk overnight. But it's years between each, and there are always 5-10 just waiting in the wings willing to sell me absolutely anything from anyone. I've dealt with four different companies to supply Cisco Meraki kit (and that's one of those "Merkai phone you up because you've dared to order your kit from someone else this time around and do you want to change who your supplier is?" places that drives me mad). I have a company that sells mainly Axis IP cameras who are looking into buying their rival's equipment because I asked them to.

When a company doesn't want to give you want you want, you move on rather rapidly, and I'm happier to move very quickly and on a whim / minor issue because there are just so many others competing that I can play them off against each other. But it's never been hard to get someone who'll resell anything you ask of them. I have at least 100 emails in my inbox (after I refuse their calls or just fob them off with "If you want to get on the list, you have to be searchable in my inbox") from similar companies, some of them vying to regain 10-year-old business with me. Most of them I'd use quite happily. But I have to take it with the knowledge that a) they are paying other companies their profit, b) they have little to no influence, c) after special "introductory" deals, they're usually more expensive than just buying the kit straight (but that can work to your advantage), d) they often disappear overnight - even big names like Misco once were...

[Lee D]

I had a friend who used to work for Simply Computers, back in the day (in the Watford office, I believe, but I may be wrong).

Then they were bought up / renamed by Misco.

Then Systemax bought up Misco.

Now Misco/Systemax look like they're dead. They also own WStore, and that uses the InMac name. These were all big names at some point in their existence.

I can't say I'm surprised. At one point, the days of flicking through PC Pro tomes as thick as your thumb looking at the shiny-new, they were some of the biggest... but even then I only used them for little commodity items. Neither I nor the guy who worked for them had a computer from them, even with the staff discount, and rarely used them for anything else.

Then mail-order became old-hat and, honestly, it took them a long time to work out what to sell. For the last 5-10 years they've been just a parts-pusher - in one door, out the other as quickly as feasibly possible. Standard stock. No unique selling point. The Maplin of the mail-order world - nothing they have that you couldn't get elsewhere cheaper, faster and more pleasantly but people used them because they'd always used them.

In all that time, I literally don't think I've ever ordered anything from any of those companies. They just couldn't come close to competing for business-level transactions, and they were too obscure for retail - people didn't know what they were buying, and those who knew went elsewhere. I can't think of a market they catered to. They used to phone me up occasionally or I'd use them as that handy "third-quote" because I know they'd be more expensive.

I'm sure they'll blame "Amazon" (or that CEO SEC filing controversy listed on their Wiki page) but those companies were in absolute freefall for many years and did nothing about it, besides making themselves even less relevant.

To be honest, nothing of value is being lost. They're box-pushers, and thinking that competes with others by standing out is a mistake. It's sad to see all the old names slowly being bought up, but that's because they just don't adapt.

[Mandy Dingle]

No, nothing of value being lost at all. Just potentially hard working people's jobs and careers. Nice comment.

[Lee D]

"No, nothing of value being lost at all. Just potentially hard working people's jobs and careers. Nice comment."

Would you rather we set them up in a fake office, with fake customers calling, buying fake products, just to give them some money?

Companies come and go. Therefore jobs come and go. There's no such thing as a job for life any more. Even politicians can't stay in one job more than a couple of years. Anyone with half a brain / skill / experience would have been out the door long ago.

Never got the "it's people's jobs" thing. If they were doing their jobs, the company wouldn't be bust. And by doing their job, I include things like "walking out the door, registering vocal complaints, when the CEO spends £10k on a golfing holiday while the sales team struggle to sell the rubbish kit his golfing buddy has lumbered you with". We live in an enlightened, rich, pseudo-democracy. There's a dole queue. And there's jobs out there. It's not like they'll be a starving Welsh miner with nothing to feed his family with and hundreds of miles from the nearest work. These people work in Watford and places like that! (P.S. I live in a neighbouring town!).

The company is bust. The jobs are gone. Anyone with half a mind at the company knows what was coming (as it's been coming for MANY years as I describe). They needed to get out long ago. No fool ever stays somewhere that's going into administration - not even for their pension / redundancy as you can be sure that's the first thing that's found to be inadequately funded. I'm not unsympathetic - but precisely because this thing happens all the time and is the norm now, not the exception, I can't say I'm crying into my cornflakes for them either.

Don't work for bad companies. And don't EVER give me the "there are no jobs" rubbish. Certainly not if they live anywhere near Watford.

[katrinab]

I used to work in their Greenock office, about 20 years ago. They were called HSC Global back then, had an office in Wellingborough called Misco, and also Simply where your friend worked. Even with the staff discount, it was cheaper to buy from PC World, or the independent resellers under the railway arches in the south side of Glasgow.

[The Godfather]

Spot on judgement and assessment....

[m-k]

I'm warning you. If you say 'brexit' once more...

Right. Who threw that?!

[Mandy Dingle]

If this is true, it's a sad day. I've worked with Misco for years and there are a lot of loyal, hardworking people there who are now facing an uncertain future. The rumour mill has been churning for a while now but I can't help but think there will be a certain amount of smugness in the industry if this turns out to be true. I really hope people remember that this affects people's lives and isn't just something to score some cheap points from. Just a thought.

[Andy Taylor]

Back in the day

certain organisations would have rules about who you could order stuff from due to the beancounters wanting credit accounts and the like. I'm sure Misco etc only survived so long because of this.

[Anonymous Coward]

Re: Back in the day

Lazy IT buyers kept the company going using the web. Some staff will have a shock as the sales job was just web codes it’s not proper sales account management. Lots of people left Misco to Try and sell elsewhere but failed as they haven’t got the web site. True sales people pitch the products to the client not waiting for them to come to you. Feel sorry for the people at Misco but it’s a different sales world in other companies

[Anonymous Coward]

Re: Back in the day

Yes, as I'd previously posted I other threads. Years ago the local authority I worked for took corporate buying in-house. First they'd started by banning us from buying from Misco ( which I never did because they were too expensive, but the admin staff did get some routine stuff from them). Then they went on to centralise buying, and all our stuff started to come from... Misco. At a higher cost than I'd been paying when I did the ordering, much slower than I'd been getting it, and often even more expensive than nipping down to Curry's or than I could negotiate at one of the local retailers down the road.

[Alan Brown]

Re: Back in the day

" At a higher cost than I'd been paying when I did the ordering, much slower than I'd been getting it, and often even more expensive than nipping down to Curry's or than I could negotiate at one of the local retailers down the road."

The fault for _THAT_ lays firmly at the feet of your purchasing staff.

Until 2007 Misco was one of our cheapest suppliers and Currys etc didn't get a look in. It changed after our procurement manager retired. His replacement would have trouble negotiating her way out of a paper bag and the prices crept up markedly over a 3 year period.

[rmason]

I See "Lee D's" point

I think the words "most" or "many" can now be applied to people who have been through this sort of thing.

The majority of these employees (yes, it's horrific that people will lose their job, been there, done that) will have been through years of those "stand up meetings" or web based jobs, or how ever it is done there showing bad numbers, numbers going in the wrong direction.

They have probably been through being told they can't afford pay raises or a new hire that's probably needed or equipment upgrades that weren't done etc etc. Whatever level you work at there are always signs.

They have either sat through colleagues being made redundant or at the very least read email announcements about an office closing and/or staff going in another area of the business.

I certainly have been one of those idiots he speaks of. "Perhaps by breaking myself by trying to do the job of three people the company can magically not become shite and turn things around!!"

No, we simply went in the next round of redundancies.

If your CV hasn't been doing the rounds for a while already at this point, you're in weird denial and will probably find yourself sat on the sofa, frantically job searching and applying for all sorts of bollocks to pay the bills at some point in the future.

[Anonymous Coward]

Misfiring Misco

Ah, Misco. I'm only surprised they lasted as long as they did.

Getting employees to write fake online customer reviews was actually part of the marketing department's strategy. Obviously unethical and unsurprisingly illegal. Of course, telling the marketing manager that this was not on, just resulted in her laughing and insisting "everybody does it".

Trying to tell the company to invest more in the website and to get a proper budget in for social? All fell on deaf ears. The company was run by spreadsheet, staff wages were looked at as a burden, and there'd be the redundancy sniper rifle picking off some of the most talented and charming people. Unsurprisingly, they moved to local competitors or elsewhere in the industry. I moved up the technology food chain after falling out with the marketing manager.

We're looking at a company that has a website that still doesn't look right on mobile phones or tablets. A company that took its USP - excellent customer service - over to Budapest to barely-trained workers who lost all the inertia and goodwill, just to save a few bucks.

Misco from 2011 onwards is certainly an example of how not to do business.

[Orders]

Sad day.

The industry is losing a great company.

The problem being with vendors creating timewasting pipeline deal registration portals, no interest in paying the resellers their full due and going out of their way to avoid, customer comparing with non vat paying european resellers (ie no 20% vat), competing with grey market, all box shifting companies reducing margins, frameworks with 2% margin on them. It's all a poisonous and Misco attracted the cheaper, money-saving at any cost customers - often gov customers who will shop around un til they find a reseller that will sell at next to nothing margin. The customer doesn't realise often that a laptop may cost £700 but with £20 margin - isn't enough to sustain supporting the product after the sale or keep the company in business.

If you want John Lewis service, you need to leave a bit of profit for the reseller.

Sadly unless you sell services, the "tin" won't support a company.

[Roj Blake]

Re: Sad day.

In my experience, Misco's problem was never that their margins were lower than everyone else's.

[Alan Brown]

Re: Sad day.

"customer comparing with non vat paying european resellers (ie no 20% vat), "

Bullshit. Everything sold in the EU is subject to VAT.

I've seen this excuse bandied about by a number of resellers who try to justify higher UK pricing (sometimes as much as 50% higher) over the rest of europe with this line.(*)

Business quotes in the UK and the EU are both exVAT - and VAT is actually _higher_ in several countries, but they still work out cheaper.

(*) I actually had one dealer tell me he had an exclusive UK sales license for a product and he would take us to court to prevent us buying from Germany. I pointed out the "Single market" laws and suggested that the results if he tried would be very entertaining.

[Terry 6]

Re: Sad day.

Many years ago, maybe late 70s, because UK IT prices for small computers were so much higher in the UK the American manufacturers offered UK resellers huge discounts to quick start the market. The UK resellers pocketed the difference and kept the prices high. Instead they made excuses for why USA prices were (then) so much lower.. Tax rates, import duties etc etc. In reality, in some parts of UK business (not particularly IT) there was, and probably still is, a view that high margins had to be retained, even in the face of low turnover. In effect companies would rather sell maybe,1000 units and make £100 profit on each than sell 10000 and make £50 on each. My late dad was a factory manager. It used to worry him so much that his owners would drive away business like that. He saw contracts vanishing, often overseas, when he knew that they could easily have retained them. He also saw businesses collapse under the weight of these sorts of policies ( not just high margins, but low investment - ageing machinery that was unreliable that sort of thing).

[localzuk]

Sad to see them go

But, the market is different now. There's less "value add" and "upselling" that can be done. I'd blame the advent of tablets for that really - can't really up-sell an iPad or add extras/upgrades, so the profit margin is what it is.

This sort of thing happens in lots of markets when things change. Some companies are surviving by changing the way they operate (not just box shifting), Misco didn't really change.

[Anonymous Coward]

Can't upsell an iPad?

What are you on about?

[localzuk]

People don't upsell on iPads really - they're bought at a spec for a task. What can you sell with an iPad? A case? The margins on cases are tiny too. There's only a few models of iPad available anyway.

Compare that to a PC or laptop? There's thousands of models, upgrades etc... You can sell software with them too, can't with an iPad.

[TheComputerist]

Site down

The site is now down, having been replaced with the following message:

Please direct all enquiries to: [e-mail]

Geoffrey Rowley, Thomas MacLennan and John Lowe of FRP Advisory LLP were appointed Joint Administrators of Misco UK Limited on 19th October 2017.

The Joint Administrators act as agents of the Company without personal liability.