The PC Company closes its doors

New Zealand's largest local PC assembler, The PC Company, closed its doors across the nation on Monday September 8 and stopped answering the phones.

Managing director Colin Brown denied the firm was insolvent and issued a statement that said he is looking 'to restructure' the business.

The firm is understood to owe 'hundreds of thousands' of dollars to Ingram Micro New Zealand, but Ingram director John Dunbar said the distributor was insured for any debt losses.

It is believed Tech Pacific - which had done business with The PC Company in the past - isn't owed money. A spokesperson for debenture holder ANZ declined to comment.

The PC Company is based in Hamilton, two hours south of Auckland, and has a network of seven retail stores nationwide.

Industry speculation is that Brown's options are to pull back to one store in Hamilton, attract an investor, or fold.

At its peak, The PC Company employed 150 staff and produced over 2000 PCs a month. In one quarter last year it ranked number two PC supplier in New Zealand behind HP, but ahead of IBM and Dell.

More recently staff numbers have been estimated at from 60 to 80. The PC Company had restructured in May.

When it began in 1982 the firm was called Pegasus Electronics and was a wholesale assembler. It became The PC Company in 1997. In that same year it was hit by the demise of its major retail partner Best Buy.

PC manufacturing volumes are stable in New Zealand at around 38 percent of all PCs sold, but commentators say a shift has occurred towards small local assemblers operating out of malls, strips, and front bedrooms, and selling upgrade boxes as much as whole computers.

It was reported in May that Brown acknowledged consumers were no longer as interested in the 'bundle' approach and that the firm could no longer rely on that for income. He had sought to establish more business selling to business.

Another factor, identified by research firm IDC, is a retail war that the PC Company, HP, and other suppliers got into mid last year with bundles under NZ$2000, which brought sales forward substantially and lead to a vacuum later that year.

Tech Pacific New Zealand boss Tony Butler said the nature of the PC industry had changed so fast, and this had combined with reducing prices and an appreciating NZ dollar to make it difficult for anyone carrying stock.

As an example he said a PC box had dropped 50 percent in value in 18 months, with 30 percent due to the exchange rate.

The PC Company was a founding member of the Computer Manufacturers Association of New Zealand and hence a contributor to a fund that will support warranties if the firm is liquidated.

But the biggest concerns expressed this week have been from those with PCs in for repair. Some have confirmed they have received their machines back and Brown issued a statement yesterday to say that returning these machines is the priority of the skeleton staff still in place.

He said negotiations are continuing with interested parties and a statement will then be issued.