Comment: The fall and rapid rise of PC firms

 

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Posted on 23 Mar 2007 at 10:11

It hasn't been a good year for the Watfords of this world. The football team looks a dead cert for relegation, while PC maker Watford Electronics recently went into administration.

Yet, while the Premiership dishes out a hefty punishment to under-performing teams (namely, millions in lost TV revenue and, cruelly, Tuesday night away trips to Stoke), certain executives behind Watford Electronics have shown remarkable 'bouncebackability'. They've created a new firm, Globally Ltd, which has acquired the assets - but few of the liabilities - of the former company.

The similarities between Watford Electronics and Globally Ltd are uncanny: both trade from the same Bedfordshire address; Watford's former MD, Shiraz Jessa, may only 'remain with the company in an advisory capacity', but the new director is one Mahmood Jessa, a member of the family and former Watford Electronics logistics manager.

PC Pro reader Wayne Davies would be very keen to hear from either of the Jessas, because he paid £295 for a monitor from Watford's Savastore.com site just a day before it went into administration, and has heard nothing since. And, judging by the forums at www.pcpro.co.uk and elsewhere, he's not alone. Even though Savastore claimed it didn't charge customers before goods were dispatched, a spokesperson for Luton Trading Standards told us: 'In one particular case, a customer claimed he placed an order at 11:01 in the morning, he was charged at 11:04, and by midday the company had gone into administration.' Globally Ltd 'will endeavour to fulfill all unshipped Savastore.com orders,' the company claims.

But why are companies allowed to run up huge debts, enter administration, change the sign above the door and continue trading as if nothing has happened? The spokesperson for Trading Standards claims that even though the company has passed hands from one Jessa to another and remains in the same building, 'there's no real redress. Each is dealt with as a separate company. There isn't much we can do.' Watford's administrators claim the sale to Globally Ltd 'has achieved a better result for the company [Watford] than would have been achieved in liquidation.' Whether it's a better result for Watford's customers is debatable.

There's one crucial difference between Watford Electronics and Globally Ltd, however. You may recall that last autumn Watford created a spin-off company called Redten Internet, which offered a 'free PC' to customers prepared to sign a three-year broadband contract (see issue 147, p21). Given that free PC schemes had bombed in the past, we asked what would happen to Redten's customers should the company cease trading. 'The Redten Internet broadband and PC offer has been underwritten by Watford Electronics Ltd,' the company replied in a statement last October. 'In the event that Redten Communications Ltd ceases to trade, the provision of broadband will revert to Watford Electronics Ltd.'

Curiously, Globally Ltd didn't acquire Redten as part of its Watford buyout. The free PC company has effectively been cut adrift. When we asked a Redten spokesperson who was underwriting the offer now, he conceded that Redten was now a separate legal entity, with no parent company. However, that didn't stop Redten continuing to proclaim it was 'part of a successful £70m group' under the 'Why Choose Redten?' section of its website, more than a week after Watford entered administration.