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Cellnet vendor line-up under review

Cellnet vendor line-up under review

Embattled Queensland distributor, Cellnet, is in the midst of comprehensive vendor reviews and has boosted in-house marketing in an attempt to steady the ship.

The ASX-listed company recently reinstalled cofounder, Stephen Harrison, as managing director after a poor performance in the previous financial year. Review meetings with vendors are already underway and will be completed in the weeks ahead. Harrison expects to have a revised line-up completed by November.

"The third quarter has been slow for us, and so was the second quarter," he said. "My job is to make this company profitable and I will do that."

The distributor officially reported a profit for the full year to June 30, but that included a number of write-downs and one-off items such as the demerger of Mercury Interactive and the sale of a warehouse in New Zealand. It posted an operation loss of $2.5 million for the financial year following a shortfall of $400,000 in the previous 12 months.

IBM is Cellnet's biggest vendor in revenue terms and one of its longstanding partners. Harrison said this relationship was still working well but admitted the situation was less promising with HP. Cellnet distributes HP desktops, notebooks and workstations (Personal Systems Group) as well as its iPAQ handhelds. "I suppose HP has been a struggle for us over the last couple of years and we're in discussions with them - as well as all our other vendors - about how we can improve things," he said.

As far as he knew, vendor partners were very happy with the distributor, Harrison said, but any issues would hopefully be resolved during upcoming reviews. "Feedback from the channel so far has been extremely positive," he said.

As part of his strategy to reverse Cellnet's fortunes, Harrison has boosted its internal marketing and advertising activities.

He said it had been one of the first Australian distributors to have in-house marketing and advertising when he was first at the company. "Our marketing team was one of the best," Harrison recalled. "It's where we were, where we came from. Marketing in-house can be really focused."

He said dedicated advertising and marketing people knew the industry like no agency could, bringing more focus and drive to the job at hand. With that in mind, Cellnet was hiring and building a team.

"We're just about to hire three other people in that area and a couple of graphic artists as well," Harrison said. "When I started here [originally], we had eight people in that team."

The team would work on creating and developing channel initiatives and promotions for each vendor. Cellnet would be doing a lot more advertising and self promotion in the coming year, Harrison said.

HP's communications team were contacted for comment but had not replied at the time of going to press.


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