Bell focuses on profitability after Italian closure

Distributor closes loss-making division as part of 'long haul' plans for profitability

Bell is driving to improve overall profitability

Bell Micro’s decision to exit the Italian distribution market is part of its plan to improve the profitability of the overall business.

CRN revealed last week that the global distributor had placed its Milan-based
subsidiary into voluntary liquidation.

Graeme Watt, president of worldwide distribution at Bell Micro, told CRN: “We are basically exiting from Italy. It is an organisation that we have been making losses in for a number of years and while we have reduced the size of those losses, we are not comfortable about running it any more. It is quite a small operation for us now ­ turning over between €25m and €30m a year.

“We have said that we are driving to improve the profitability of the business and we have taken the decision in line with that. We see the turnaround [of the overall business] being a long haul, rather than a short haul.”

Watt added that 12 people will lose their jobs, but said it will have no impact on Bell’s suppliers, creditors and partners in Europe.

“We do not buy product in Italy, we buy in other countries, and it is pretty small beer to most of our vendors. We anticipate zero impact on vendor partners that we manage across Europe and we will still export through our German operation.”

Alastair Edwards, senior analyst at Canalys, agreed the Italian market was tricky.
“In one way it is fragmented, but in another sense it is quite consolidated,” he said. “Esprinet is the biggest player in the market, and it has always been difficult for the smaller players to compete. Other players such as Actebis have also pulled out of Italy recently.

“Because Italy is quite decentralised, you need a presence in every sub-region to reach all the resellers and if you do not have critical mass, you are never going to grow and get the market share you need to make it a worthwhile business.”