CCI looks to e-tailers for growth

Distributor looks to online specialists as trade resale business declines, annual report reveals

CCI Distribution is looking to e-tail channels to get it back on the growth track as bricks-and-mortar resellers fall victim to reduced credit insurance and razor-thin margins.

This is according to the Harrogate-based distributor's 2010 report, recently filed with Companies House. Sales for the year were down three per cent to £32.9m, with the firm enduring an operating loss of £153,000, compared with a £35,000 profit in 2009.

Sales through trade resellers were down 18 per cent to £12m, while those through B2B specialists dropped five per cent to £6.9m. Retail revenue was steady at £2.7m, but e-tail sales shot up 24 per cent to £11.3m.

The directors' report said: "We continued to be cautious about retail sales volumes due to the extensive restrictions in credit insurance limits and very tight margins. This has allowed us to continue our focus on the growth of trade via e-tailers, where stock risk is much lower, turnaround faster and payment terms more reasonable."

The report goes on to reveal that CCI undertook a cost reduction programme in Q2 2010, resulting in some redundancies. During last year sales and marketing staff at the distributor were also equipped with a new CRM system, and QlikView business intelligence technology was deployed. This has "significantly improved...internal reporting and planning", said CCI.

Some 12 vendors were added to the distributor's portfolio in 2010, with a focus on tapping into the higher end of the storage market. An exclusive distribution deal with vendor Storage Options was also agreed and 5,000 units were sold before the end of the year, claimed the directors' report.

"[The partnership] will focus on new technologies - eg tablet PCs and IP cameras - where the banner 'Technology Without Compromise' will be adopted," it added.