Micro Warehouse files for Chapter 11
What is to become of Europe?
Micro Warehouse, one of the biggest and best-known computer dealers, has filed for Chapter 11 in the US.
The move follows this week's knockdown sale of its North American assets for $22m and outstanding receivables - this for a business turning over $940m a year and, showing the trouble it got itself into, a pathetic $14m in inventory at time of sale. Looks like the company exhausted the patience of suppliers and ran out of credit lines.
According to the Chapter 11 filing, as reported by Bloomberg News, Micro Warehouse owes $100m and has assets of $100m. The biggest creditor, Ingram Micro, is owed $17m. Ingram says it will take a $20m charge to account for the collapse of one of its biggest customers.
Micro Warehouse is of course big in Europe too, with catalogue-style operations serving the UK, Germany, France and the Netherlands. These companies continue as normal. But it will be interesting to see if their operations can escape the chaos surrounding North America. That would mean entirely separate treasury operations, ringfenced bank accounts, regionally-blinkered vendors, and customers keeping their nerve. ®