Computer dealer Orchard Computer Products Ltd was liquidated on December 9 by accountants KPMG Peat Marwick McLintock and Kidsons Impey. Orchard began trading only in June 1990, but collapsed as a result of poor management; it grew too rapidly at the expense of gross margins, which did not cover the company’s burgeoning overheads, and it suffered further from diversifying into low margin clone computers. After making budgeted losses during the first 18 months of trading, Orchard’s directors were misled into continuing operations because of illusory profits during the first half of 1992 – the profits were actually based on stock evaluation and accounting errors. Orchard also incurred a bad debt of UKP13,000 from Palace Pictures – now in administration; but the death blow came when orders slumped during the last two months of trading; oth er problems included initial undercapitalisation.
