Online computer hardware store Sybaritic has entered into liquidation after it became insolvent. This is according to former owner Graeme Simms.
Simms said that he applied for voluntary liquidation after an unforeseen transaction pushed Sybaritic into insolvency.
News of Sybaritic’s closure emerged after another e-commerce site, TechStop, sent out an e-mail which said that it “came to their attention” that Sybaritic was being liquidated due to insolvency.
The e-mail was addressed to former Sybaritic customers and offered them a R300 discount voucher for every R1,000 they spent at TechStop, up to the balance they had with Sybaritic.
A former client who received this e-mail and had an outstanding order in excess of R2,000 contacted MyBroadband to express their misgivings about the link between TechStop and Sybaritic.
A quick Whois search revealed that both Sybaritic.co.za and TechStop.co.za were registered to Simms, and that the two businesses used the same postal address.
Simms could not be reached at the phone numbers listed for Sybaritic, but he was first to pick up at the phone number for TechStop, where Simms said he had taken on the role as a business developer for investors.
Asked about what happened at Sybaritic, Simms said that they took all possible measures to keep the business going.
The fall of Sybaritic
“I invested significant additional funds into the company,” Simms said. “As a result, I remain the largest creditor to Sybaritic.”
Sybaritic’s downfall was in part due to forecasts about changes in the economy that proved to be incorrect, which in turn affected their costing. Simms said that Sybaritic also had warehousing and staff obligations that it could not maintain.
When it became clear that Sybaritic was insolvent and unable to trade out of the situation, Simms said they could not continue operations because it would have been illegal for him to do so. It was then that he applied for voluntary liquidation.
“This was done in an effort to personally take responsibility for the situation Sybaritic was in,” Simms said. “No entrepreneur is infallible from things that can go wrong in any business.”
He said that every effort was made to refund clients for orders that could not be fulfilled.
“All credit card transactions were reversed, and the remaining cash available was used to refund as many customers as possible,” Simms said. “There is no cash available at Sybaritic and no further refunds are possible.”
Simms said that it was not possible for a new venture like TechStop to take on the books of an insolvent liquidation and offer automatic refunds.
The best TechStop could do to make good on the situation was to offer clients, who had credit balances, a 30% rebate on their purchases with TechStop to cover their remaining credit.
For that reason, Simms said he believes that TechStop’s offer of a R300 discount voucher for every R1,000 spent was very generous.
Those who were unhappy with the arrangement will unfortunately have to participate in Sybaritic’s liquidation process, he added.
Challenged on suspicions, accusations
Some former Sybaritic clients are not convinced that Simms’ intentions are noble, though.
In addition to being listed as the registrant for both domains, and the two businesses sharing the same address, the Whois record for TechStop.co.za shows that it was registered to Simms on 24 November 2014.
Yet according to e-mail correspondence dated 9 December 2014, which MyBroadband has seen, Simms was still promising clients that he would push his suppliers to deliver goods that had been ordered weeks prior.
Simms said that elements of Sybaritic were used early in the development of the TechStop website.
“I am the registrant and contact person for the TechStop domain, and we are using the same P.O. Box details at this time,” Simms confirmed.
Regarding the issue of timing of the TechStop domain registration and his communication with customers during December, Simms said that Sybaritic continued to chase up and fulfil orders as far as possible.
The decision to liquidate was difficult to come to, and not made lightly, he added.
“In developing the business at TechStop, and in keeping with my core values of integrity and professionalism, we aim to prove that TechStop is a serious venture and is committed to doing the right thing,” Simms said.