Arrow restructure hits UK operations

Distribution Subsidiaries to be pulled under Microtronica brand.

Components distributor Arrow has unveiled plans to restructure its UK operation and consolidate its three subsidiaries into one.

The $8 billion US distributor will merge its UK PC components subsidiaries - MMD PC, Microtronica and Multichip - under the umbrella of Microtronica, in a bid to improve its service to dealers and provide a unified message.

Steve Clark, general manager of Multichip, stated: 'It is pointless doing business under different names. These companies need to be brought under one recognised name to avoid confusion.'

The name change is expected on 1 January 1999, the start of Arrow's financial year. Arrow has been operating in the UK since 1986.

The consolidation will help MMD and Microtronica increase sales through the channel. Their main business is providing components to PC builders, while Multichip sells to catalogue resellers and smaller systems integrators.

The three will now sell together through the same catalogue in the autumn.

Les Billing, UK managing director of computer products at Arrow, stressed: 'We will not be getting rid of any areas of the business. There is no overlap between the three. The logistics operation has already been centralised through the main Arrow warehouse in Bedford. This is just a logical step to tie them all together.'

He added that Microtronica had never actively targeted the retail channel but its lines would be appropriate for them. The main brands sold are Intel, Quantum, Matrox, Diamond and AMD.

The three company offices are expected to move into one building in Reading by June next year. Multichip has offices in Hayes, while MMD and Microtronica operate out of Reading.

Clark pointed out that Arrow also intended to 'significantly increase' the number of staff at the consolidated company.

Arrow Electronics, which trades on the New York stock market, issued a second quarter profits warning two months ago (PC Dealer, 24 June).

Billing put the warning down to falling prices due to oversupply in the components market, adding that it would not deter the distributor's acquisitive nature.