Feeds

Apple dealer cull makes sense

Unwelcome distraction

  • alert
  • submit to reddit

The essential guide to IT transformation

Opinion This article was first published in February 1999 Apple UK is terminating all reseller contracts at the end of February and dealers are up in arms. Particularly CJ Graphics, the Apple dealership with a £12 million turnover that went bust last month. The London Apple dealer is blaming its chief supplier, Apple, for the "forced disposal" of the company to rival dealership Rapid Group. CJ Graphics owner, Floral Street, sold the assets of the company for "up to £500,000" on 29 January, after its bank pulled the plug on all the company's financing facilities. AIM-listed Floral Street has ceased trading and is initiating insolvency procedures - the directors expect there to be a deficiency of net assets. Some financial engineer will pay good money for reversing a company or two into the shell that is now Floral Street. Aziz Punja, chief executive of CJ Graphics, said: "It is no secret that we experienced a downturn in business during the latter part of 1998. This, combined with mounting orders due to Apple's lack of product and the recent changes imposed by Apple, has really forced our hand." The buck clearly stops there, as far as CJ Graphics is concerned. Apple has struggled to keep up with UK demand for the iMac, its most popular launch, with many models on allocation throughout the fourth quarter last year. But how many other Apple UK dealers have gone bust recently because of product shortages or channel changes? Banks do not usually pull the plug for these reasons. Besides, CJ Graphics could have been reasonably certain that it would retain a direct relationship with Apple, post channel reorganisation. With five retail outlets nationwide, CJ Graphics looks less dependent on Apple than many of its rivals. The company also sells graphics arts materials and office furniture, as well as Apple kit. Its future now looks secure under the wing of the Rapid Group. What about the future of the remaining Apple dealers, who are now expected to apply for reaccreditation? The future doesn't look bright for low-volume dealers, who are already losing out in new volume breaks introduced by Apple disties Ingram Micro and Computer 2000. This could force smaller resellers to raise prices by up to eight per cent, which, as one source said, will mean they will lose out to low-price mail-order resellers. But is Apple behaving so outrageously? It wants minimum volume commitments of #60,000 a year from its dealers, which doesn't seem such an awful lot. It is also trying to impose minimum requirements for staff size and company standards. Apple appears to have concluded that it has too many dealers in the UK. And Apple would be right. Its direct sales operation, AppleStore, is already a fixture on the Mac scene and with a few choice third-party applications and add-ons, could represent a big threat to the mail-order guys. In this context, low-volume, low value-adding resellers are an irritating distraction. ®

Boost IT visibility and business value

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Fast And Furious 6 cammer thrown in slammer for nearly three years
Man jailed for dodgy cinema recording of Hollywood movie
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Scale data protection with your virtual environment
To scale at the rate of virtualization growth, data protection solutions need to adopt new capabilities and simplify current features.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?