Action Computer Supplies has outlined an online route to recovery by claiming it is working with 10 per cent of its customers over the Web.
The Middlesex reseller, following its weak results and the collapse of the merger with Insight Enterprises, conceded that the year had been tough but believes it will quickly recover as it reaps the rewards of its restructure.
The Insight deal collapsed after Action revealed a sharp drop in profit. Pre-tax profit fell to £2.2 million from £7.1 million for the year ended 31 August. Turnover was up 11 per cent at £276.6 million.
However, Action revealed that the online side of the business was robust. Turnover from the Web division increased 34 per cent to £25.8 million. Action racked up 14,800 customers buying online out of its 142,000 customer base. The site was relaunched on 3 November.
George La Plante, managing director of Action, told PC Dealer: "We are looking at phasing out the catalogue. It makes sense to put the products on the Web because we can also increase the number of products carried and cut costs. But people are used to the catalogue, so we will need a transition period."
La Plante added that Action would look for organic growth and would also target the SME sector. He confirmed that the Insight deal would not be rekindled.
The company's difficulties were blamed on the corporate reduction in spending due to the millennium, and distractions related to the merger.
During the year, Action reduced staff levels by 46 and shut its offices in Camberley, Milton Keynes and Salford.
The reorganisation of the sales teams resulted in the formation of a 96-strong telesales division. The company also installed a £5 million computer system and opened a call centre.
Henry Lewis, chairman of Action, said he expected sales to return to normal levels in the first quarter of 2000. But he added that he did not anticipate a spike in sales.
"Companies will start to buy normally again," he said.
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