In the wake of its cancelled sale agreement with beleaguered US distributor CHS Electronics, Melbourne-based national distributor CHA has announced a new business structure some say is about six months late.
The changes were announ-ced last week by returning Board member Roger Bushell. They include the closing down of warehousing facilities around Australia which is 'streamlining its warehousing function to its major distribution centre in Melbourne', according to a company statement, and the appointment of Peter Thatcher as managing director.
Thatcher is to take on the responsibilities of the now-departed volume products general manager Paul Williams, as well as those of former marketing manager James Robbins.
But the streamlining of its warehouse function to Melbourne is understood to have meant the loss of more than 10 jobs, including some other management positions. And this, on top of a difficult period which saw the CHS deal fall apart and disappointing sales figures, has given rise to concerns about the distributor's future.
The changes to the operation are seen by some as a bid to restore via- bility to the credit-stretched company, and Bushell himself said he was 'excited by the challenge of getting it back to where it was back in August'. He acknowledged that the company's focus on the CHS deal meant that the management had taken its eye off the ball. This was especially significant in the second half of 1999 when its sales were seriously disrupted by shortages of Toshiba stock. CHA was Toshiba's biggest distributor last year and it is believed that the vendor represents 40 per cent of its business.
CHA CEO Stephen Sampson admitted that revenues for the current financial year have fallen and are expected to finish significantly down on last year. Despite this, Sampson claimed, 'The restructure will allow us to still make a profit.'
Bushell asserted that besides the retrenchments and centralising of the warehousing and delivery, the company has put some strategies in place to improve its cashflow and profitability. He said that it was running an obsolete stock sale and claimed that they will receive the full allocation of scheduled Toshiba stock for February and March. This, he said, will satisfy back orders and put CHA into profit.
One interested observer is Toshiba ISD general manager Bruce Lakin, which affirmed its support for the distributor. 'We recognise that CHA has gone through some tough trading during which it has been starved of Toshiba stock. Its volume to date year-on-year is down, largely due to the constrained stock, but with supply now much better, it has had a better start to the year,' Lakin said. ' And we expect the third quarter to be much better,' he added.
And Acer's national channels manager, Greg Mikaelian, voiced his support for the distributor, the company's first national distributor for over a year. He said that especially over the last four or five months, 'It has been doing some good business.'
On the restructure, he added that they have made decisions they should have made six months ago.