WStore grows 2009 sales but skinny margins persist

Online reseller boosts top line but continues to operate at a loss

Online for growth: The VAR claims it will continue to invest in its e-commerce capabilities

Despite a five per cent sales bump and a reduction in staff costs, online reseller WStore continued to run at an operating loss last year.

Documents filed with Companies House this week reveal that, for the 12 months to 2 January, the VAR posted sales of £23.5m – a rise of more than £1m on 2008. But a £20.7m cost of sales and administrative expenses of £2.8m wiped out the firm's entire gross margin, resulting in a £24,000 operational loss.

Interest and other charges took the net loss for 2009 to more than £75,000, but this still represents a marked improvement on the £300,000-plus loss WStore endured in 2008.

The directors' report for the year stresses the significance of the top-line growth and narrowing losses, which it attributes to a reduction in staff costs. During 2009 the VAR's distribution staff numbers were trimmed from 40 to 36. Admin headcount remained steady at 31.

In September 2009 WStore was acquired by $3bn (£1.9bn) turnover US giant Systemax, which also owns Wellingborough-based online VAR Misco. The directors' report, signed by Systemax chief executive Richard Leeds, claims WStore is now well placed to deepen and develop relationships with end users and vendors.

"We are well placed to future develop our strong relationships with customers and manufacturers in the future," said the report. "The directors are committed to the ongoing investment in people, e-commerce capabilities, relationship marketing and direct mail catalogues, as the backbone to the continued success of the company."