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Action to ditch paper for Net

Another nail in the coffin for the Post Office

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Action Computer Supplies is ditching mail order for online sales with the launch of a new Web site today. The reseller, which last month saw its proposed buyout by US giant Insight Enterprises fall through, plans to phase out its paper catalogues and sell entirely online. This move is part of a wider cost-cutting exercise, according to Henry Lewis, chairman of the Middlesex-based company. Action has already started reducing catalogue costs through the adoption of a cheaper printing system. It has replaced 46 of its field sales staff with 100 telesales staff and shut down offices in Camberley, Milton Keynes and Salford. The company has also spent £5 million on a new computer system and cut back on its loyalty point scheme for customers. The move to the Web will encourage a wider range of customers, including smaller individual sales, the company said. Action traditionally sells to larger corporates, but has seen sales suffer this year due to these customers holding back on orders in the face of Y2K. Action saw Web turnover increase 34 per cent to £25.8 million this year, with 14,800 customers buying online. Its Web site, relaunched today, will be faster and offer more back office integration such as order tracking. George La Plante, Action MD, said: "As the Web takes over, we’ll reduce the paper catalogue. But people are so used to the catalogue that we’ll need to have a transition period. The Web will cut costs as paper is replaced with electronic communications." The moves will help Action get back on track after the collapse of the Insight deal. "We will get back to our core business -- making a living the hard way," said Lewis. Conditions in the market were tougher than a year ago, but there had been no reduction in growth, he said. "We plan to expand rapidly next year through acquisition and organic growth. Globalisation will probably follow," he said. Lewis expects sales to return to "normal" levels in the first quarter of next year. "I don't expect a huge pent-up demand, but companies will start to buy normally again." Action posted pre-tax profit before exceptionals of £2.2 million on sales of £276.6 million, for the year ended 31 August, as pre-announced last month. This compared to last year's £7.1 million and £249.6 million. ®

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