Systemax in the red after Q2 consumer slump

CEO Richard Leeds aims to fix marketing and inventory management after "unacceptable" operating loss and sales decline

Resale giant Systemax posted an annual sales decline and slumped to an operating loss in 2012's second quarter as the soft consumer market smashed the US firm in the pocket.

For the three months to the end of June, the New York state-based firm saw total revenue fall 2.6 per cent year on year to $849.5m (£543m). Operating losses for the quarter stood at $2m, compared with a profit of $21.9m in the corresponding period last year.

B2B sales for the period were up 7.7 per cent in dollar terms to $519.6m. But consumer revenue plummeted 15.3 per cent to $329.9m. This consumer slump – particularly in North America – was picked out as the reason for the second-quarter operating loss.

Revenue was down on an annual basis across most product categories, with computer sales falling two per cent to $238.3m, and software and accessories seeing revenue decline five per cent to $237.6m. Components posted a seven per cent drop, with sales coming in at $99.5m, while turnover from consumer electronics fell 14 per cent to $147.7m.

The industrial products segment was the only one to provide growth, with sales up a whopping 31 per cent to $102.9m.

Chief executive Richard Leeds expressed his displeasure at the Q2 operating loss and claimed the firm is taking steps to rectify its problems. Initiatives for marketing, improved customer experience and better inventory management are already under way, he claimed.

"In technology B2B, Europe continues to significantly outperform the region, generating 12 per cent top-line growth on a constant currency basis led by the UK, France and the Netherlands, while North America delivered modest growth in a soft market environment," he said.

"Our North American consumer business had a low double-digit reduction in top-line sales as the consumer electronics industry recorded double-digit declines across key product categories. The industry is facing a number of cyclical challenges, including soft demand and shifting consumer habits. That said, the operating loss we recorded in this business is not acceptable and we are taking actions to address the factors within our control."