Digiland Australia’s channel strategy was in disarray last week with the news that the distributor had dramatically scaled down its Australian operation, and intends to hand over a number of its vendor relationships to sales and marketing company, eXeed.
Digiland’s restructure has seen it halve its Australian workforce and shed its managing director. The company has made about 35 staff redundant and intends to move both its Sydney and Melbourne operations to smaller premises.
Accompanying its restructuring news, Digiland announced an equity investment which will see it take a significant share in eXeed. Terms of the deal were still being hammered out last week, with Digiland’s regional director for South-East Asian operations, Khoo Teng Liat, in Australia to finalise the deal.
While Digiland had suggested it would become a majority shareholder in eXeed, eXeed managing director, Michael Bosnar, said the parties hadn’t reached agreement on whether Digiland’s share would be that great.
Digiland’s scaled down Australian operation will now to focus on the whitebox market, maintaining existing vendors including Maxtor, Hitachi and MSI.
It plans to hand its branded IT products, including Acer, Epson and Fujitsu, to eXeed. However, it is unclear whether affected vendors will agree to move over to eXeed.
Acer, Epson and Maxtor were last week taking a wait and see approach, ahead of formal meetings with Digiland and eXeed management, before deciding their part in the new structure.
Epson had “only been given a very brief understanding” of Digiland and eXeed’s plans, director of marketing communications, Mike Pleasants, said.
While the Digiland model “was working” for Epson, the vendor would need to assess the new eXeed and Digiland model to see “whether it’s the right fit or not,” he said.
Bosnar said the process of merging the two companies customer databases has already begun, and that eXeed was currently contacting Digiland customers to explain the migration process.
While Digiland intended to maintain its points of presence across Australia, both its Sydney and Melbourne operations were set to relocate to smaller premises, according to Digiland marketing manager, James Macbeth.
With the Sydney warehouse lease due to expire, the operation would move within the next 3 to 5 weeks, with Melbourne moving around November, Macbeth said. The Queensland and Perth operations would remain.
With the departure of Paul Kruss as managing director, Digiland’s director of operations, Colin de Costa, has assumed responsibility for the Australian operation.
Kruss left Digiland after a little more than three months as managing director.
Now heading up a local workforce of between 30 and 35, de Costa will report to Digiland’s Singapore headquarters.
Due to the smaller size of the restructured operation, Digiland won’t be appointing a new managing director, he said.