Arrow closing Stockport office and considering nearshoring move - sources

Doug Woodburn
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Arrow closing Stockport office and considering nearshoring move - sources

Distributor tight-lipped on rumours it is closing a satellite office and weighing up moving some functions out to Poland

Arrow Enterprise Computing Solutions (ECS) is shutting its Stockport office and is, separately, considering nearshoring some back-office functions to Poland, CRN understands.

The small north-western satellite office, which handles some of Arrow's Symantec and Veritas business, is set to close in December, according to sources.

Arrow owes its Stockport presence to Codework, a Symantec distributor it inherited through its 2012 acquisition of Altimate, which had bought Codework two years earlier. The building is still owned by Codework founder Divyesh Lakhani.

Arrow declined to comment but one source said a formal letter had been sent to staff this week informing them that the office may close and that they may be made redundant. Verbally, employees had previously been told in a staff meeting that the location is definitely surplus to requirements, the source added. The potential of some staff working from home has also apparently been raised.

Nearshoring rumours

The closure comes as multiple sources told us Arrow has over recent months been examining the possibility of moving some UK back-office functions out to Poland.

This would be in line with several of its competitors including Ingram Micro, which has centralised some EMEA functions to Bulgaria, and Westcon, which is in the process of shifting some back-office functions out to Romania.

One source felt the two events could be loosely linked in that some of the Symantec order processing functions carried out in Stockport could be the type of functions Arrow is considering moving to eastern Europe.

In its most recent fiscal second quarter, Arrow ECS posted flat sales of $2.14bn, with the European business growing sales six per cent year on year to $720m.

"It is fairly common knowledge that there is a push with the Arrow ECS business to build shared services and reduce costs," said another source. "Predominantly we're talking about back-office functions - order processing, that kind of thing, and maybe some telemarketing functions.

"They have used a shared service set up in Israel for a number of countries for several years, so it's not like it's a new model."

Wherever the functions currently carried out by the Stockport office are moved, Arrow will go out of its way to ensure Symantec is kept on side, however, another source said.

"I don't think they would do anything that would cause problems for its Symantec contract. It's a massive vendor for them," they said.

Graeme Watt, EMEA president of distributor Avnet Technology Solutions, said he would not be surprised if Arrow was considering nearshoring more functions.

"All of the multinationals are nearshoring an element of their business as they seek to improve productivity and efficiencies," he said.

Bruce Hockin, director of solutions at VAD Cloud Distribution, said: "It's no real surprise; these are public, pan-EMEA businesses who are constantly looking to create shareholder value. The market hasn't got more money and, depending on what analyst report you read, is compressing. So it makes sense that the supply chain is trying to strip out costs to remain relevant and competitive."

But Barrie Desmond, chief operating officer of distributor Exclusive Networks, argued that nearshoring isn't the right way forward.

"It's a theme with these more global broadliners. They seem to be planning to contract their cost base and go for efficiency and productivity gains, which for me isn't a strategy for growth," he said.

Arrow declined to comment on either the rumoured office closure or nearshoring speculation.

"As always, we do not respond to speculation regarding our business strategy and/or our suppliers," a statement from the distributor read.

 

 

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