Dixons in talks to gain direct supply

Retail Creative Labs targeted to provide products to high street.

Dixons' desire to source product direct has re-surfaced this week after Creative Labs admitted it had held discussions with the high street retailer over changing its supply policy.

The retail giant has its own warehouse facilities and buys the majority of its non-IT equipment direct from vendors.

Since the retailer entered the PC market, it has attempted to set up similar buying policies direct with vendors as it has with its con-computer products. While some of the hardware vendors are understood to ship their product direct to Dixons, software giant Microsoft and Creative Labs are two vendors to have resisted this pressure.

One insider at Creative Labs revealed last week that Dixons and the vendor had held talks with a view to the vendor shipping product direct to the retailer's stores.

But the source claimed it did not want to upset the relationship with Ingram Micro, which supplies Dixons with Creative.

One observer claimed: 'This is always the crux of the problem as vendors hate to disrupt things with the distributors. The scenario of selling through retail means distributors do not really need to be involved in the sales equation.'

A senior director from Creative Labs was reported as making a speech at Euro Channels two years ago, in which he claimed that the vendor was looking to develop a direct relationship with all of its retailers across Europe.

He also suggested that Creative Labs would be better off dealing direct with retailers, as they could keep better control over product and sales.

Lisa Perez, European channel marketing manager at Creative Labs, confirmed that Creative supported Dixons directly by giving it marketing funds, but it did not ship product direct to the retailer.

She commented: 'There have been discussions but I am not sure whether they are from its side or ours.' She was unable to comment further.

Dixons was unavailable for comment.