Battle-hardened online reseller Systemax has appointed a new UK head for its Misco subsidiary in an attempt to overcome recent setbacks.
The firm, which lost its European vice-president last month (CRN, 21 March), was forced to restate its financials for each of the first three quarters of 2004 and the year ended 31 December 2003 because of the "discovery of certain errors in accounting for inventory at its UK subsidiary".
Its recent Q4 and year-end 2004 results stated that operating losses in Europe had increased to $9.4m from $2.5m in Q4 2003, but the firm claimed a strong US performance and record overall quarterly results, with a 26 per cent increase in turnover. For the year, Europe saw losses of $12.5m, compared with $5.2m in 2003.
New UK general manager, Sandy Price, who previously worked as UK finance manager for Systemax Europe, said the firm's recent decision to restructure its European business was going well (CRN, 31 January).
"We are working towards consolidation of the business by eliminating duplication, and we are seeing great results, she said."
She added that the firm is working in conjunction with Systemax's US subsidiary TigerDirect. "We have a long-term commitment from its management, and we are working very closely with them," she said. Price said the firm is focusing on growing its business-to-business side while continuing to invest in its consumer arm.
However, Alastair Edwards, senior analyst at Canalys, said the firm could find the going tough in Europe.
"The main problem suffered by companies like Systemax is pricing pressures as a result of increasing competition from smaller online players. The US is faring better than Europe, and all these things need to be fixed and rebalanced in Europe if the entire company is going to be profitable," he said.
"It is a tough job. The only way Systemax can compete is by continuing to cut operating costs."
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