Schadt ist kaput

Vobis, PC Specialist take on warranties

High street vendors Vobis and PC Specialist have stepped in to honour customer warranties of failed German PC dealer Schadt ComputerTechnik GmbH. The move - a little more than a week after the leading German PC dealer was served with a bankruptcy notice - should at least provide some crumb of comfort for Schadt's former customers after a week of uncertainty. Germany is the most competitive PC market in Europe and Schadt's bankruptcy only serves to reinforce the difficulties faced by companies operating on such tight margins. "They had a bad summer," said Ruud Ankover of German-based analysts GFK. "With such slow sales in such a price aggressive market, it was always going to be difficult for them." Even so, for a company the size of Schadt - which employed 780 people in more than 120 outlets - it's difficult to imagine that one quarter's performance is enough to send it to the scrap yard. "They've been teetering on the edge for ages," said Max Hotopf, editor of the channels newsletter PC Europa. " This comes as no surprise to me since the assembly retail model employed by Schadt has failed everywhere else in Europe. "They were difficult to deal with and it simply highlights the problem of doing business this way." Schadt's trading difficulties were made worse by the threat from discount supermarkets. Aldi, with operations here in the UK, declined to comment on its own performance in this sector but some sources say that they work to operating margins from as little as three or four per cent. Ankover believes that Aldi and others like it represent a continuing threat to the established players in the market and does not believe that Schadt's removal will ease the pressure significantly. Last year Schadt sold around 70,000 PCs generating sales of more than DM450 million in a country where every person spends five times more on computers than on personal hygiene. ®

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