Fears are mounting over the future of veteran Tottenham Court Road retailer Micro Anvika after credit insurers removed cover for suppliers and it was forced to trade on a cash-only basis.
The firm continues to pay bills on time but channel sources have questioned whether the pressure on working capital is sustainable following the decision by indemnifiers Atradius and QBE, which leaves distributors' debts unsecured.
Company insiders said insurers asked for up-to-date management accounts to ascertain if the business was still on a downward trajectory and pulled cover after they could not access the information.
The worsening market conditions are reflected in Micro Anvika's numbers with sales of £43m in the year to 31 March 2008 falling to £30m by fiscal 2010. During that time the retailer swung from a retained profit of £500,000 to losses just shy of £1m.
The firm has now applied to change its year-end to 30 June, which some in the channel have taken as an indication that losses have risen and sales slumped further in fiscal 2011.
Usually, companies extend the account reference date when they have made a couple of acquisitions to tidy the books up.
Directors Ramesh Gohill and Atul Patel have also set up two company shells - Micro Anvika (Stratford Ltd) and Anvika Ltd - incorporated on 8 July and 29 September respectively, listed from the same trading premise as the Tottenham Court Road HQ.
This has led to fears that should the trading climate not improve and Micro Anvika bosses seek to place the firm into administration, the vehicles for a phoenix are already in place.
Micro Anvika set up shop in 1984 at the heart of London's independent retailing community and flogs a mix of brands including Apple Sony, HP and Samsung. It has a concession in Harrods.
Micro Anvika did not respond to call for comment. ®