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CCM Distribution outlines post MBO strategy

Ecommerce still on backburner

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CCM Distribution expects to have its MBO wrapped up by the end of May, and has outlined plans to grow sales to £30 million for this financial year. The Cheshire-based business last week announced it was switching tactics to become a high-tech investment house called Fundamental e-Investments. As a result, CCM MD Brent Cutler is leading a multi-million pound management buyout of the computer components distribution part of the business. According to Cutler, the MBO is at an "advanced stage" and should be finished in four to six weeks. Fundamental e-Investments will keep a small stake in private company CCM – less than 10 per cent. Cutler hopes to grow CCM's turnover from £23 million to £30 million for the year ending 30 September 2000. "People now want more value for less money," said Cutler. "This means we need to increase the service to companies, and at the same time cut prices." This strategy would bring in lower margins, but on a higher turnover, he said. CCM has also started its own range of products called Freedom – which are re-branded components from other vendors. The scheme, currently using between 10 and 20 manufacturers' kit, means CCM takes on the warranty and replaces faulty goods to resellers. It has also promised to dump any vendors who do not honour warranties. Regarding its e-commerce site, CCM has put the launch date back again – to May. Although useful to check availability of stock, Net-wary Cutler does not see it as a viable selling tool for distributors just yet. "There is a vast difference between a consumer buying a book from Amazon, and system builders buying a motherboard online… There is evidence that ecommerce it isn't working for other distributors," he said. ® Related stories: CCM hives off distribution in MBO CCM dips toe in e-commerce waters Falling prices dent CCM figures

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