Target breaks £25m sales barrier amid indie spending boom

Yorkshire distributor's sales have doubled since 2008

Distributor Target Components claims vibrancy is returning to the independent retail sector after breaking the £25m turnover barrier.

Target saw sales bounce 19 per cent to £25.5m in the 12 months to 31 March 2014, with the majority of growth coming not from new customers but higher average spend among existing customers.

Managing director Paul Cubbage said the trend points to an upturn in the independent retail/reseller sector from where Target draws the bulk of its sales.

In March for instance, Target generated £300,000 of sales growth from existing customers spending more, compared with just £100,000 from net customer gain.

In previous years the mix has tended to be biased towards net customer gain, Cubbage said.

"Whilst increasing customer numbers suggests growth solely due to us gaining market share, increased average spend could be interpreted as our customers – primarily indies and small to medium-sized resellers – being much stronger than in previous years," Cubbage explained.

"There's a vibrancy coming back that hasn't been around for a few years."

Unlike rival components and systems distributors such as Ingram Micro, Tech Data and VIP, Target doesn't touch the bigger retailers, Cubbage said.

Target's turnover has more than doubled since 2008 and it now has about 3,000 active customers, or 5,000 including its Servers Plus arm.

The Castleford-based firm shares 10 per cent of profits equally between staff each year. Although profit numbers for fiscal 2014 are yet to be finalised, Cubbage revealed that the profit share element will be higher than its average annual profit over its first 10 years in business.

Target set 96 new performance records over the year against its key performance indicators, Cubbage said, including achieving 99.8 per cent order accuracy.

Based on its daily sales rate so far this month, Target will "comfortably" breach the £30m sales barrier in its fiscal 2015, Cubbage added.

"We've had a really strong start to the new year," he said.