Gerry takes prodigal Compaq back, opens 15 stores

Gerry takes prodigal Compaq back, opens 15 stores

Retail giant Harvey Norman is downplaying the return of Compaq PCs to its shelves this week instead preferring to talk up plans to open up to 15 new stores in Australia and New Zealand this year.

Harvey Norman's general manager, computers and communication, John Slack-Smith wasn't giving anything away, but it would have been the opportunity of a lifetime for most retailers - Compaq coming back to the bargaining table cap-in-hand.

In a testament to the growing strengh of the mass merchant channel John Slack-Smith confirmed yesterday the vendor has re-signed with the retailer after nearly three years in the wilderness.

Compaq was barred from Harvey Norman in 1999 for its decision to set up a chain of Compaq Connect retail outlets. At the time, the vendor was said to deriving in excess of $60 million in annual sales at time.

On the table for Harvey Norman is not only the PC manufacturer's Presario consumer range, but also its commercial range of higher-end PCs and servers.

"We will predominantly stock the consumer range. There will be some franchises that will stock the commercial range, but that will be the exception rather than the rule," Slack-Smith told ARN.

Slack-Smith denied Harvey Norman leveraged the collapse of Compaq's franchised retail operation to secure a better deal, claiming the two companies had been talking for some time.

"We both thought it would be beneficial for the Compaq brand to be in our stores," Slack-Smith said.

Similarly Slack-Smith denounced the move would impact the retailer's white box sales. "I do two-tenths of nothing in the clone PC business," he said.

While Slack-Smith claims the retailer is looking for incremental business from Compaq rather than a sharp increase in sales, he does concede the reintroduction of Compaq will change the mix of his existing PC sales. However, Slack-Smith claims the opening of a number of retail outlets should appease any disgruntled vendors.

"We do expect it may take some of the business from those other brands [Hewlett-Packard, Packard Bell, IBM, Toshiba, Acer, NEC]. But the justification for that is I have a swag of stores opening up around the country by the end of the year, as well as a number of existing stores growing significantly," stated Slack-Smith.

"We as a company have an insatiable appetite for growth. I have a spreadsheet in front of me with 15 additional stores for Australia and New Zealand for this year alone," he added.Photograph: Harvey Norman's John Slack-Smith

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