What happened to Rock? Custom PC interviews former Chief Executive

Posted at: Friday 4th July 2008

From boom to bust, we get the lowdown on what went wrong at Rock Group - and how everything is looking better for the future - from CEO, Nick Boardman.

We spoke to Nick Boardman, who was Chief Executive of Rock Group before it went into administration and was subsequently bought out by Stone Computers earlier this year, to find out why one of the UK's best known laptop vendors went into liquidation, what has happened to the company since, and how it plans to go forward for 2008.

CPC: What was the reason that Rock went into administration? News reports mentioned employee theft – how could this be entirely to blame for a big company like Rock going under?

Nick: In May 2007, the directors became concerned about the behaviour of Rock’s Sales Manager. A mutual agreement was reached between Rock and the Sales Manager for him to leave the business. Investigations later revealed that stock totalling some £220,000 had been misappropriated by him over a period of 12 months, with the majority in the last two months of employment. The individual has been convicted of theft and is currently serving a three year prison sentence.

The misappropriation of the stock coupled with its timing in the low season of the IT sector resulted in significant pressure on Rock’s cash resources in the second half of 2007. As a result, some suppliers were paid later than usual with adverse implications on Rock’s credit ratings and credit limits. The reduction in credit limits consequently made it difficult to obtain sufficient components to meet demand.

CPC: There were reports last year that you had investment from a company called ROK – what happened with that?

Nick: Rock's bank remained supportive throughout our issues and it was agreed that Rock would enter into negotiations with parties who had expressed an interest in acquiring the business in whole or in part. The bank agreed an increase on the Company’s overdraft facility in October 2007 to facilitate a sale.

Negotiations with interested parties progressed well and in November 2007 ROK Entertainment Group (REG) took a majority stake, with a 51% share swap between the shareholders of Eikon Group (Rock’s parent company) and REG. REG did make a cash investment, but our major suppliers were reticent in maintaining our credit limits without some trading history in the new company structure.

Following a withdrawal of the credit facilities by our major supplier in early 2008, Rock required a further cash investment. Rock was unable to secure any further cash investment and the Board of Directors sought the advice of an insolvency specialist in April 2008, with Rock entering Administration on 8 May 2008.