Dubai channel hit by latest reseller exit

Impact of challenging trading conditions still being felt in the market

Tags: United Arab Emirates
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Dubai channel hit by latest reseller exit Metropolitan’s showroom is based in the Al Ain Centre, better known in the market as ‘Computer Plaza’. (ITP Images)
By  Andrew Seymour Published  September 30, 2010

The Dubai channel is reeling from claims that a major reseller has left the market owing more than US$10m.

Channel sources say Metropolitan Computer, which is based in the Al Ain Centre, ran into serious financial problems earlier this month. Its owner remains unreachable and its showroom has been closed.

According to its website, Metropolitan offers products from a string of international vendors including Acer, Asus, Cisco, Dell, HP, Microsoft, Intel, Lenovo, Logitech, Samsung, Sony and Toshiba.

The company is believed to employ around 20 staff, including those in warehouse and logistics functions.

Talk in the market is that suppliers and banks are owed between US$10m and U$12m, sparking fears of a ripple effect in the dealer channel if creditors are unable to get their money.

At least one trader who sold products to the company is said to be waiting on payments of AED600,000 (US$160,000), while two major IT distributors are each thought to have been hit for AED4m and AED6m (US$1m and US$1.6m) respectively.

Shailendra Rughwani, president of the Dubai Computer Group (DCG), confirmed Metropolitan was a member of the association, but said the company had rejected its offer of help after details of its financial problems emerged.

"Metropolitan was a DCG member and the owner personally had been in the Dubai market for 20 years. He had done decent business for many years, but in the last couple of years he probably had some financial difficulties and we feel he planned this exit. We approached [Metropolitan] to offer our support and help in any way we could, but they declined it," he said.

Rughwani confirmed that some members of the DCG were owed money by Metropolitan and said a group of those affected had already taken the matter to the police.

Metropolitan's exit is regarded as the most significant to impact the Dubai market since the closure of Fortex, Micron and MST during the channel credit crisis four years ago.

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