Hardware buying and marketing group Mica entered administration last night citing the pressure of the recession. Stax Trade Centres will take over the wholesaling responsibility.
In an email to suppliers the company said that the launch of the Mica Vault followed by the credit crunch and recession had made the situation unsustainable.
It said: "Its launch coincided with the current recession that no one could have predicted. Despite recruiting new members, enhancing the product range and achieving record output levels, sales are not enough to cover costs and will not be for the foreseeable future.
"Costs have been pared back...however, growing losses and negative cashflow have made the ongoing situation unsustainable.
"A member-led national executive considered the options available and concluded that Mica UK Ltd could not continue in its current format and very reluctantly placed the company in the hands of administrators on July 8.
"We're all extremely sorry for the inevitable upheaval this will cause you. However, the executive was determined to find a way for members and suppliers to continue benefiting from the strengths of the group. Therefore, a new company, Mica DIY, has been formed and is now trading, to take the business forward.
"We have agreed terms with Stax Trade Centres to replace the Vault as our nationwide wholesaler."
The email, specific to suppliers, continued: "We would like minimum disruption to you and the Mica members so we would like to see you soon to discuss future trading. In the meantime please would you continue to accept delivered-to-store orders from Mica members and invoice them to Mica DIY Ltd on your current agreed Mica Group terms. All July invoices will be picked up by Mica DIY Ltd."
In fact Mica DIY is not a new company and was incorporated in June 1999 as Mica (UK) Management Ltd. The name was changed on June 30 after its registered address was changed on June 3. And, while the directors are listed as Stephen Ball and Belinda Barnard, the company is currently listed as non-trading.
Neither director was available to comment. However, a company spokesperson told DIY Week: ""The company went into administration yesterday afternoon. The warehouse and all stock is in the hands of the administrators. We will continue to trade under the name Mica DIY and Mica members will still be able to trade under the Mica brand, although they will no longer be supplied directly by Mica"
Stax joint md David Hibbert said of Stax's future involvement: "We've supplied Mica for more than 10 years and we've really been part and parcel of their growth in that period. We're keen to continue that support to Mica DIY and to offer all the assistance we can to Mica retailers. Our huge range and buying power means Mica retailers will be able to offer a great range at competitive prices."
Kevin Murphy of Leonard Curtis has been appointed as administrator and can be contacted on 0161 767 1250.
Are you a Mica supplier or a Mica member? What do you think? Have your say and leave a comment below.