Europe is lagging behind North America in terms of the recession and is getting worse every passing month with rising unemployment.
That was the view of Ingram chief executive Greg Spierkel at the annual European meeting of the Global Technology Distribution Council (GTDC) last week.
GTDC members, which include Avnet, Ingram Micro, Tech Data, Bell Micro and Arrow, met in Docklands last week to discuss the impact of the downturn on global distribution.
Speaking in a panel debate at the event, Spierkel added: “Our sales are down for the current year and we view this recession as much deeper than anything else we have faced. IT spending is more discretionary than food or basics, which means it is taking a bigger downdraft, but there is a groundswell of ageing equipment out there, which is encouraging.”
Roy Vallee, chief executive of Avnet, said: “We will also be down this year financially, but the interesting thing from our perspective is that so far the decline from peak to trough is less in this cycle than it was in 2001. I think we will get through this downturn more quickly, but the upturn may be more gradual in nature.”
Allesandro Cattani, chief executive of Italian distributor Esprinet said resellers need to show distributors that they have confidence in their own businesses.
“The downturn has been caused by poor management of credit risk by banks, so we are not going to copy the banks. There are resellers out there with money, but are asking us to put our money in their companies. We are asking them to show that they believe in their own businesses by investing their own money too.”
Vendors also came under scrutiny with the panel dividing them into supportive and non-supportive camps.
Klaus Hellmich, chief executive of Actebis, said: “Vendors are reacting very differently. Some are extending payment terms to help keep the channel buying, whereas others are asking us to put our cash into inventory. This is not what we are used to cash should be invested on the customer side, ie the resellers.”
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