Principal goes under as creditors take a hit

Creditors of Principal Distribution are unlikely to get any cash back, receivers KPMG have warned. The Macintosh distributor, based in Broughton near Manchester, went into receivership last week owing around £1 million. Just five out of the 35 staff have been kept on to help sell the name, goodwill and around £400,000 of stock. This was less than two months after a management buy-in, where non-executive chairman Rod Macmillan sold his 49 per cent stake in the company to directors Jon Pritchard, Miles Naylor and Tim Noyes. KPMG blamed the poor margins and cut-throat rivalry in the industry, along with the distributor losing several franchise agreements. Joint case manager Mike Seery said: "The industry is in disarray and some of the suppliers weren't as supportive as they could have been," according to a report in this week’s Microscope magazine. Seery admitted creditors faced little hope of regaining any money owed. In the last year, Principal had lost the Adobe, Symantec, Netopia, Hermstedt, Pinnacle, Sony Monitors and Media 100 franchises. ®