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By | Paul Kunert 7th February 2012 16:01

Channel body count hits dotcom implosion high

Reseller bloodbath in 2011

The channel body count in 2011 reached a high not seen since the dotcom bubble burst, stats from credit reference agency Graydon UK reveal.

In Q4 88 firms collapsed, up nearly 30 per cent year-on-year, which took the tally for the whole of 2011 to 356, up by almost one third on reseller fatalities in the previous twelve months.

"Insolvencies and administration fell sequentially in Q4, but clearly the figure for the overall year is the highest we have seen for nine years," said Alan Norton, head of intelligence at Graydon UK.

Businesses hitting the wall were typically small established resellers that ran into cash flow difficulties or the last of the national systems builders including PARS and Mesh Computers. The UK economy shrank in the final three months of 2011 and if this contraction is repeated in the current quarter then Blighty is technically in recession. However Norton said this was a "short and shallow" issue, and that insolvencies in the UK had peaked last year.

"We have started to see a US-led global recovery and typically Europe lags that economy by two quarters. We expect things to improve in the second half of the year," he told The Reg.

Firms in the channel will be praying he is right. ®

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