Reseller insolvencies soar in Q3

UPDATED A rise in channel insolvencies could be an indication that thebiting economic conditions over the past eighteen months have finally taken a toll. According to figures from Graydon UK, the number of resellersthat went to the wall in the thirdquarter jumped29.5%year-on-year to 79. Alan Norto

UPDATED

A rise in channel insolvencies could be an indication that the biting economic conditions over the past eighteen months have finally taken a toll.

According to figures from Graydon UK, the number of resellers that went to the wall in the third quarter jumped 29.5% year-on-year to 79.

Alan Norton, head of intelligence at the credit reference agency, branded the increase as "significant" and said the summer slowdown was clearly the final nail in the coffin for those businesses.  

"The third quarter coincides with the holiday season and traditionally spend levels drop off during this period, prior to picking up in the fourth quarter," he told MicroScope.

Graydon stats revealed 45 firms were wound up voluntarily compared to 42 in Q3 2009 but compulsory liquidations more than doubled and there was a 54% upsurge in receiverships.

Norton said 95% of the casualties were SME resellers - with Calyx representing the largest corporate collapse in the quarter - and voiced concerns that a growing number of businesses were finally succumbing to the economic squeeze.

Resellers have proved to be a resilient community, continually defying forecasters of doom throughout the recession; only last quarter official figures showed a drop in insolvencies. 

"The figures suggest we could be in for some turbulent times ahead, particularly as the government spending cuts start to bite. Interest rates are likely to rise in the future and there is still a lack of finance available from the banks," said Norton.

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