ICL ends trade sales operation

ICL Multivendor Computing (ICL MV) closed down its trade sales operation last week, citing poor profitability and incompatibility with its core business.

ICL Multivendor Computing (ICL MV) closed down its trade sales operation last week, citing poor profitability and incompatibility with its core business.

Martin Smith, operations director of ICL MV, said traditional channel hardware distribution did not fit with the company's mission to provide procurement, configuration and deployment services to ICL's customers.

"For the past two years, Multivendor Computing has been under a plan of transformation, and is now a multinational IT utility company offering life-cycle services to ICL accounts," he said.

An ICL representative added that its trade distribution business was only a small part of what ICL MV did, and had been losing a small but significant amount of money.

Smith dismissed suggestions that ICL's profitable Sun distribution subsidiary Tplc may also be sold off because it is also peripheral to ICL's main business. But parent Fujitsu plans to sell at least 25 per cent of ICL this year.

Smith said no effort was made to sell the distribution business as an on-going concern. Brian Burke, manager of Dun & Bradstreet's IT industry division Computanet, said this could have been because ICL did not anticipate finding a buyer, but suggested any sale would have been hampered if the vendors involved failed to guarantee distribution franchises.

The trade sales division turned over about £60m annually, said Smith. Inventory had been run down, and there will be no sale of excess stock. Burke noted this effectively meant £60m of available credit has been taken out of the channel. "It will be interesting to see who picks it up," he said.

About 20 employees are being directly affected by the closure of ICL MV. It is making every effort to re-employ them within the company, said Smith.