Essential reading for retailers and suppliers in the home improvement market

Mica enters administration

Published: 9 July 2009
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.
Mica enters administration
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.

Comments

Published prior to March 2014
By Stephen Brown
I joined Mica in Oct 2007. The purpose of my appointment was to establish a central hub and distribution depot for ALL Mica Members.
The company s ethos, positive attitude and professionalism were amongst the qualities that attracted me to the company.

Put quite simply. Used correctly the Mica vault would provide the opportunity for members to decrease their storage space and increase their retail space, eliminate minimum orders, and allow the members to purchase a more diverse product range.

I have read with interest how suppliers are reacting to mica members at this time. Its, supplier frenzy, as they all try to attract new custom by offering the latest temporary discount. Mica stood for quality and value at sensible prices, how can any supplier argue with that? After all it s your products we were marketing. Put quite simply, it is a sign of the times; suppliers have to reduce minimum order values to obtain sales. Tough times call for tough measures.

The Vault was planned, designed and implemented at a time of financial collapse. (Who could have predicted that?) I would like to liaise with those people, whom have a crystal ball and claim to have predicted this!!!!!!!!!!!!!!!!, To those people I simply say, Please share with me this weeks winning lotto numbers.

I am an employee whom through this process will shortly find him self unemployed. I am not bitter, upset yes disappointed too. I am not blaming individuals or making accusations simply expressing my opinion.

I wish the new business every success, and sincerely hope, members continue to provide support to (Mica DIY) along with suppliers. Please continue to provide the general public with value for money products.
Published prior to March 2014
By Mica User
I think we all should thank Phil Williams for all his kind and helpful words of encouragement to all the Mica suppliers and retailers.
Published prior to March 2014
By Phil Williams
Having worked For Mica since Jan 08 as the head of Sales/Customer Service i am soon to be made redundant. Funny how people love to comment on the misfortune of others, but dont have the balls to put their name!! What i would call "keyboard warriors", (hard man on here, Wimp in reality!!!) Lets clear things up and put the blame where it should be. In 18 months of trading the Vault has gone from strength to strength, but whilst a majority of the 180+ members have used us as their dedicated 1st supplier, there are 30% or more who have NEVER placed a single order through the us. Where does the blame lie? Squarely at their door!!! I can honestly say in 26 years of work, i have never worked with, or for, a better set of people. Yes its had its ups and downs but what job doesn't. I will soon become another statistic in this "credit crunch" and will be having to search for another job. I just hope that the people who are slagging off on here never have to go through the same....In fact no i dont, i hope sometime in the very near future your business is in the same boat and your life is going down the pan!!!! Lets just see how you like it!!!
Published prior to March 2014
By Andy Vaughan - BHETA
We will be holding a telephone forum tomorrow afternoon(15th July) at 4pm for interested parties to 'attend'(See related story). If you need more information, please contact me on 01604 622023 or av@bheta.co.uk
Cheers - Andy
Published prior to March 2014
By Martin Gibbons MD - Jegs Electrical
We were a Mica supplier several years ago but could no longer comply with their onerous financial requirements, preferring to put all our discount into our pricing which is of greater benefit to our customers. With the exception of a few, all the Mica customers continued to trade directly with us than go to the alternative Mica suppliers so we feel our decision was vindicated.

Jegs Electrical
Published prior to March 2014
By Mica Retailer
The writing was on the wall for Mica ages ago when certain large suppliers started to deal direct with retailers offering them better terms.
Published prior to March 2014
By Bemused Mica Retailer
I am genuinely sorry for the suppliers who have lost money in this fiasco (particularly small ones), but when I look at the Mica Vault stock list (which we have never been allowed to see before), it is evident there was a total lack of stock control at Mica (some of the quantities of obscure and expensive items are quite ridiculous), but also, it shows that some suppliers obviously thought it was Christmas and made hay supplying products they must have known would not sell. Small wonder the chickens came home to roost..... Perhaps they should have put in stock on consignment with strict legal safeguards ? Of course it might not have happened at all if every member had been properly consulted and not just been told that the Board had decided the Vault was going to happen (with an embargo on open discussion). But then, democracy has never been a Mica strong point.....
Published prior to March 2014
By G M Bell
Supplier to Mica

I have known the directors over the past 3 years of our association and I am content that no existing director will benefit personally from this process.

The demise of any company is sad and it is now vital for jobs and for the future of the brand that the new venture is successful.

Members will buy on service and price and thus far that has been the bedrock of the Mica brand.

I wish the new venture every success and the Volt concept was a case of right idea wrong timing, and nobody could have predicted that.
Published prior to March 2014
By Adam Simcox (Alan Silverwood Ltd)
As a supplier to several MICA members (but not to the hub/vault) Alan Silverwood Ltd has to question, in the current economic climate, why MICA members feel that they need to continue to source through a central office (and why suppliers feel that they need to supply the central office).
Many suppliers are eager for business and now have low minimum order values (ours has been 100 carriage paid for years), and are eager for business; I cannot think of any outlet who would devote shelf space to anything less. As for suppliers, why risk losing a potentially large sum of money with one accounting house (whose track record now has to be viewed with caution) when you could trade with individual stores. Admittedly, there are higher costs involved in handling 20, 30, 50 different accounts, but this is surely made up by the removal of the discount and the spread of financial risk.
Published prior to March 2014
By Richard Hazell
Why dont they (The new MICA DIY) promise to honour the debt owed to the suppliers so that over time they can be repaid for stock supplied. If Mica-DIY are keen to take old suppliers with them and trade again then the money cant exactly be "forgotton". Perhaps a delayed payment term or an agreement to pay over time would take the bitter taste away. That way at least they get their money for stock supplied?
Published prior to March 2014
By Mica User
The comments by 'Committed Mica Retailer' just sound like a load of Mica Spin.

No store should be so reliant on Mica that they could not carry on without them. In these difficult times you should be able to deal direct with any supplier at similar, if not better, terms.

Mica UK Ltd can't lay blame to their failure simply due to the Vault. If the management are so talented, why wasn't the Vault run as a separate incorporated company, so its failure wouldn't bring Mica down?

In real terms, the Mica brand is not particularly well known as a national brand. This can be easily demonstrated by asking any random consumer on the street. It is not the Mica brand that has made the stores, but the stores that have made Mica. The hard work by each store, including specialist knowledge by the staff, has provided loyalty in the locality of each store.

Stores were running before Mica existed and will continue to do so after they have gone.
Published prior to March 2014
By Committed Mica Retailer
As a committed and founder member of Mica I NEED MICA DIY LTD. Prior to the Vault, Mica was successfully serving its members with promotion, marketing and buying deals. The Vault was the right decision for Mica, economic times have prevented its success. The decision to put Mica into administration was not an easy one and certainly not taken lightly and not strategically timed. Suppliers will feel very angry understandably. However if Mica DIY Ltd is not supported by suppliers and members alike then 13 years of very hard work and commitment will have been in vain and the future of independent hardware shops will have been dealt another blow. Corporate identity is crucial to the industry's success and for me that is MICA.
Published prior to March 2014
By Bernard
As one of the first 50 in Mica we feel let down by the way this has been done.I don't blame direct suppliers for not moving to the "new mica" and other companies are being very supportive to us as an independant and are willing to
supply direct.Foundation of sand for Mica Diy
Published prior to March 2014
By EX MICA SUPPLIER
I wonder what the Mica retailers think about the way suppliers have been treated? Chatting to several of our customers they have lost all faith in the Mica brand. How can Mica continue without the support of suppliers?
Published prior to March 2014
By Observer
It looks as if Mica directors have not broken the law. In the same way that MPs didn't break the law with their expenses claims.
And Stax !!---how pleased you must be with your part in this adventure...a nice new, cheap warehouse and lots of bargain stock.
Congratulations to you all. You must be proud.
Published prior to March 2014
By Colin Sanders, Graydon UK Ltd
This is not the first business to take advantage of the Enterprise act regarding pre-pack administration and it will not be the last for certain.

Taking a moral stance in respect of supplying is commendable, but it relies on all taking this stance and alas this will not be the case. Information is king at the moment and Credit Insurance has not helped either
Published prior to March 2014
By Andy Vaughan - BHETA
In response to your question, here at BHETA we have both a credit circle, which can advise of what to do, rights etc and hopefully give an early warning of things like this. We can also provide a forum either online or in person for this to be discussed. Please contact me via the office or diyweek.net to take this further.
Regards - Andy Vaughan, DIY Director
Published prior to March 2014
By EX MICA SUPPLIER
Would it not be a good idea to have an on-line forum for Mica suppliers to discuss the position with regards to the events prior to the administration and our legal position with regards to our outstanding debts. If anybody has any ideas please comment.
Published prior to March 2014
By Supplier rep
I hate to say to my Management and most probably the management of all those supplying the Vault- but told you so, it was never going to work and all we have done is give away margin and now face a big loss. Didnt the Alarm Bells start to ring when Neil Hoy disappeared ?
Published prior to March 2014
By Mica User
There's not been much publicity about Mica UK going into administration. I thought that news agencies were currently jumping on any administration stories. Saying that, Mica UK didn't even mention anything on their own website (www.micahardware.co.uk).
Published prior to March 2014
By EX - MICA SUPPLIER
What has Mica DIY now got to offer it's members. Any trust, loyalty and brand awareness built up under the old company has surely been eroded with the appointment of the administrators.
As a Mica Supplier, we have no intention of dealing with the new company, and having spoken to several Mica members, not one has objected to dealing direct with ourselves in the future.

In my view I would not be surprised to learn that the board of management have carefully planned the date of the administration to coincide with the collection of all the May accounts from the members. Furthermore, I bet not one supplier has been paid for their May invoices.
Published prior to March 2014
By Another Mica Supplier
Interesting isn't it, Mica UK Ltd has no money and can't pay its suppliers, Mica DIY Ltd apparently has money as it wants us to continue to supply the members and invoice Mica DIY - same Directors, same company? Perhaps i'm now an ex Mica supplier
Published prior to March 2014
By Ex-Staff Member
Also strange how they got rid of the best and longest seerving employees who could have benefited the new set up, but kept the less experienced and newly arrived. Some staff only found out from this website......
Published prior to March 2014
By Mica key supplier
We never received an email, found out through DIY Week.net. Phone call not returned. Stax sorted out for ongoing supply was predictable. As any future supplier knows, there's nothing stopping any concern going bust twice.
Published prior to March 2014
By Chris Pateman
Really, the big issue going forward should not be a question of whether or not the directors of a failed business have the gall to change their letterhead and expect suppliers to continue to support them. I think we can rely upon suppliers' common sense to deal with this! Nothing to stop them honouring existing pricing whilst dealing direct with the individual retailers, is there?

Surely it's about the confidence and viability of the Mica MEMBERS, isn't it? It's about the quality of the retailers and what (if anything) they want from membership going forward. Firstly whether or not they choose to continue with a brand, Mica or otherwise. Only then, having decided what they want from the brand and what level of commitment they are prepared to give, does there need to be a discussion over whether or not they need to employ the same or different bureaucrats to administer it for them.

Personally, if I was a Mica member, I'd be w...[comment was too long]
Published prior to March 2014
By Andy Vaughan - BHETA
This is sad news, not only for it's retail members but it's suppliers too. Any members can contact me via the office in Northampton if they require advice or help regarding this.
Published prior to March 2014
By Mica Retailer
As a long term corperate logod member I hope that common sense is used when making jugements.
The new business is not identical to the old one as no wharehouse is involved. The old Mica traded succesfully for many years. The decision to open the vault was a reluctant one after all avenues were explored. All we want to do is advertise products and have them in stock when customers arrive for them.
A suprisingly difficult thing to do in this industry.

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