P&P sell-off hangs over CHS contract

Distributor?s elation over deal dampened by prospect of renegotiation

CHS Electronics? supply contract with P&P is facing uncertainty as a result of the reseller?s decision to put its desktop business up for sale.

As exclusively revealed in PC Dealer last week (18 June), Lancashire-based Skillsgroup was preparing to sell its P&P desktop business as the group wanted to concentrate its efforts on the higher margin side of the business, the areas of services and training.

The sale came at the same time as final confirmation from CHS that it had won a two-year supply contract as P&P?s preferred distributor.

The preferred status has remained with CHS since 1993 when P&P sold its broadline distribution business to Merisel, which now owns CHS.

Alison Heath, CHS sales director, said: ?It is a great win for us and a credit to the account management team who worked extremely hard on the proposal.?

However, it was not known whether there was a clause in the CHS contract which would allow the new owner of P&P?s desktop business to renegotiate the conditions of the contract. Traditionally, contracts can be renegotiated if there is a change of ownership.

Meanwhile, CHS Electronics poached two senior staff from rival Frontline. Chris Payne, Frontline business manager for components, will become business manager for disk product, and Bruce Passey, business manager for Frontline?s connectivity products, will also join CHS.

Peter Rigby, general manager of networking at CHS, said: ?Bruce will work in the networking business, particularly on the 3Com account. We need to put some more focus on that franchise, and we need someone who can be trusted to pick up and run with it straight away.?