A glimmer of hope

Looking up: It is not all doom and gloom for the channel in 2010

Job losses and continuing consolidation will be a regular fixture in the channel calendar for 2010 but things will improve, Plimsoll has claimed.

Within distribution the analyst is predicting at least 1,000 job losses during the year, and in the reseller market it is predicting about 4,000 job losses in 2010.

But despite the predictions of gloom, Plimsoll claimed the future is looking brighter for both distributors and resellers, with both sectors “slowly emerging from the malaise of the last two years.”

David Pattison, senior analyst at Plimsoll said: “The recession tore through the market in 2008 and most of 2009 like a tornado and accelerated the rate of change.

“Aggressive ‘growth at all cost’ operators have been forced to abandon their reckless strategies and many have been caught out and are in real trouble.

“Even as the market improves there are a lot of companies, large and small, that survived by the skin of their teeth and they have to rebuild their profit margins and efficiencies.

Pattison said consolidation would continue in both sectors because many firms see it as the only way out of a difficult situation.

“For many struggling companies, a buy out may be the quickest route to get the company back on an even keel – even if it means relinquishing their independence,” he said. “Inevitably, this will further increase job losses as new owners would quickly look for efficiency gains and to synergise their new acquisition with existing operations.”

But, he concluded, there is light in the gloom and doom: “Some amazing [channel] companies have come through the recession largely unaffected and look set to make 2010 their year.”