It ain't over till the fat lady sings
I thought I had finished writing about broadline distributors fighting the flab and having to shed weight after having tried to be all things to all men: not so, as the reports from Basingstoke over the past week or so have shown. Last month it was Merisel having to explain itself, and this month it's Frontline. Of the MFI trio, only Ingram Micro seems immune from the need to draw in its reins, and I for one would love to know what it's doing that is so different from the rest.
To my mind Frontline has always been characterised by a rumbustious, almost arrogant approach to the market and its competitors. It's always seemed to me to be absolutely sure of itself - confident that it is the best of the bunch. Its recent set-back and trimming down must have hit its staff hard.
I suppose the warning lights have been flashing for a while at Frontline, if only we had stopped to consider what they were. First there was the departure of director Paul Sherry last September, which came as a prelude to the demise of the distributor's advanced technical products group. Frontline wore it well at the time, with senior management explaining it away as a move necessary to maintain focus.
Then there were the leaks that the company was going to cut back its vendors and concentrate its efforts on product lines which were profitable. Again the distributor tried to explain this away by saying that these products accounted for less than one per cent of its turnover and that the vendors concerned would be better off marketing their products through other companies. Then last week, Frontline laid off 29 members of staff, two of them directors, and restructured into six business units amid talk of improving productivity and efficiency.
Is the end of the road for broadline distribution in sight? Of course not, but the broadliners ought to have learned a salutory lesson - that it's imperative they get lean and stay mean. But whether they can stay profitable is another matter. The emerging technologies, which are the money-making areas for the channel and are causing so much excitement at the moment, need a greater depth of knowledge and expertise than the margins in broadline distribution can afford to provide.
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