Compaq shops: $1M a month

Compaq shops: $1M a month

After only four months, Compaq's eight retail stores are already turning over a million dollars a month each, according to Compaq Australia's managing director Ian Penman.

The growth illustrates a healthy 1999 for the local subsidiary, which last week reported a 58 per cent growth in its retail business despite the upheaval caused last year over building its own retail stores.

Penman last week reflected on the company's financial results for the year ended December 31, in which Compaq globally announced a net income of $US569 million for 1999 compared with a net loss of $2.7 billion in 1998. Compaq Australia posted a 14 per cent revenue increase and a 25 per cent profit increase, compared to the same period last year.

`The retail stores are developing very nicely, and they are at the cusp of showing profitability,' he said.

`There is a change of focus from in-store traffic. We've always had a member of staff on outbound sales.

`We're going to grow that part of our business.' Penman said that the success of the stores has been a result of the outbound sales penetration of the local catchment area.

`We hope that as things are progressing those stores should be profitable this quarter.' And in a further clue to Compaq's retail intentions, he added: `We've got to prove that they are successful before we ask others to take ownership.' He said that the stores would be looked at this week as part of the complete consumer business review.

On its other retail business, Penman claimed all of its retail partners have enjoyed a significant increase in their business and profitability as a result of their partnership with Compaq. `All the publicity, hype and aggression is over. You count the numbers, and you see it wasn't so bad after all. All of them realised significant growth as a result of the departure of Harvey Norman,' he said.

But he stressed that the consumer business represents only 10 per cent of Compaq's Australian turnover. He pointed to the SME-focused Compaq Personal Computer Group (CPCG) accounting for 35 per cent and the Enterprise Solutions and Services Group, (which reported a 60 per cent profit increase) accounting for the remaining 55 per cent.

Thinly veiled swipe

And while the local Compaq chief was full of praise for his channel partners, he took a thinly veiled swipe at his direct selling competitors.

`I wish to show my appreciation for the efforts that they've made on behalf of Compaq last year to push either our technology or our services in the process of offering the best solution to their customer . . . One has to bare in mind that we've got competitors out there that don't involve the channel in their business and who grew faster in terms of percentage of growth than we did,' he said.

Ellen Cresswell contributed to this article

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