Market conditions see Westan drop listing plans

Market conditions see Westan drop listing plans

Westan has abandoned plans to list on the Australian Stock Exchange, citing poor market conditions and added pressures in IT distribution.

Managing director, Victor Aghtan, said the cost of listing publicly would be an unnecessary burden on the company's financials.

Westan originally announced plans to list on the ASX in January last year. To support the decision and attract merger partners, it restructured to create a distribution-only subsidiary, Westan Australia.

The decision not to go ahead with the IPO comes after Westan was forced to shut down its New Zealand operations in November. At the time, the company blamed the closure on a lack of vendor support across the Tasman, as well as added pressure from rival supplier, Synnex. Westan had been operating in NZ for four months.

The company had spent about $250,000 on the set-up.

Westan has also lost its national sales manager and a product manager, with neither to be replaced.

Aghtan said the decision was a structural change, rather than a direct result of market pressures. Instead, it would look to hire junior staff to boost numbers in Perth and Victoria.

He said the distributor was now taking a more balanced approach to the market by carrying a broad mix of AV and IT products. It had picked up several new lines - including some high-end Hi-Fi equipment - and was focusing on home theatre equipment.

Its AV business had experienced substantial growth, Aghtan said.

He estimated about 35 per cent of Westan's total sales would be AV-related by the end of this year. The figure currently stood at 20-25 per cent.

While continuing to stock its traditional PC hardware products, Aghtan said that side of the business had taken a battering in recent months from the massive market share grab made by multinationals like Dell and Acer.

"The channel has shrunk," he said. "The move to notebooks has also been much faster than most thought it would be."

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