Ho looks to breathe new life into Hallmark
- 10 May, 2006 13:16
Hallmark is to sub-distribute branded notebooks, servers and components as part of efforts to revive the company in the Northern Territory.
The latest plan of attack comes after company founder, Edward Ho, resumed control of the PC assembler following the demise of hardware distributor, Omega Technology.
Hallmark was sold to Omega in March last year. After months of struggling to pay its debts, Omega was put into administration in December. According to administrators, Pitcher Partners, the company owed about $8 million to creditors. Ho said he had only received initial payments from Omega for the sale.
"At the time, I didn't realise they were in financial trouble - they paid the deposit and I sold the business to them," he said.
Prior to the appointment of administrators, Ho said he had already started legal action against Omega. The two agreed to an out-of-court settlement late last year, which saw him take back the Hallmark business in NT. Its other facilities in South Australia and Victoria had already been dismantled as part of the merger.
"You can't get blood out of a rock, so to cut the loss I took the business back," he said. "I had been one of Omega's biggest creditors."
Hallmark's key account during its 10 years in NT has been a desktop supply contract with the state government, which expires in June. The company has not secured a place on the latest supply panel.
Despite losing the contract, Ho was confident Hallmark could continue to hold a place in the NT market. He said its best chance of achieving growth would be through forming a strategic partnership with a national distributor.
"The business here is viable; we will be here for a long time," he said. "We're a small business, but we are the only wholesaler in NT and have a lot of loyal customers who have bought from us for many years."
Hallmark's focus has been on assembling its own line of Viewmaster desktops and servers. Ho said it was now carrying a limited range of components while also sub-distributing Asus notebooks and Acer servers. The company was considering third-party options in the desktop PC space.
"We are changing direction because the market is changing," he said. "We will continue to sell our desktop PCs as it's still a significant part of our income. But we are starting to sub-distribute Acer servers.
"It comes down to scale and competitiveness. The branded products are so close to whitebox in price."
As part of its proposition, Hallmark would provide resellers with a guarantee to fulfill 90 per cent of all system orders within one working day, Ho said.