Software Warehouse's attempt to revitalise its ailing PC operation has ground to a halt following the decision of its assembly arm, Northwood Personal Computers, to suspend manufacture.
Production of the Northwood and Tashika brands was suspended for two weeks on 4 June, following a strategy review at Software Warehouse. Previously, in an interview with PC Dealer, MD Steve Bennett admitted the company's foray into the PC market had been disastrous, with some outlets only selling one or two PCs per day before a revamp last month (PC Dealer, 6 May).
Sources within Software Warehouse suggested it was unlikely the operation would resume, despite a heavy investment to cover costs such as the establishment of a home delivery and installation operation.
Tim Lightfoot, Northwood production operations manager, revealed: 'We sat around the table and looked at it objectively. I fought hammer and tongs to keep the operation, but when I went home and looked at the figures I had to agree. If a PC broke down or there were a couple of calls to tech support, the margin was gone.'
He added that other small vendors would struggle in the market.
Lightfoot admitted it was tough for mail order companies to compete against the likes of Tiny and Time. Shiraz Jessa, Watford Electronics sales and marketing director, said: 'It takes significant sell-through to support the infrastructure necessary to offer the price and quality demanded by today's consumer.'
Pete Day, Inteco analyst, commented: 'The big guys are coming into line on price, leaving less space for the likes of Northwood.'
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