Poor UK performance hurts Systemax

Losses at Systemax have widened after the UK performance contributed to a weak first quarter

Systemax is looking to get to grips with the performance of its UK operation after it became a highlight of the first quarter results for all the wrong reasons.

The reseller, which runs the Misco, WStore amd Inmac brands, saw sales from its EMEA Technology Group decline by 16% to $352.6m. Overall sales across the entire business dropped by 10% to $785.8m, compared to $873.4m a year earlier.

Losses also deepened with net income coming in a $28.6m loss compared to just $3m in the same quarter a year earlier. Things could have been worse but the industrial product group delivered growth of 23.1% and $158.9m.

The results led Systemax chairman and CEO, to promise that it would be taking steps to turn the situation around and it would be taking a specific look at how things had been going in the UK.

"In EMEA technology we had another great performance in France, which was again offset by poor performance in the U.K.  We are addressing the issues in the UK that are impacting sales," he said.

"Across our businesses we are working to improve our operations and strengthen our competitive position.  The investments we are making and our strategic initiatives should allow us to capitalize on the growth opportunities ahead.  We are singularly focused on serving the B2B marketplace and bringing more value to our customers through an expanded offering of products and solutions," he added.

In the US the business has been going through a transition as it exits the consumer business and it took an $8m hit in the first quarter from its move to exit its retail store operations.

"In North America Technology, our results were poor as a result of the impact of the restructuring and recent trends in the business.  Our efforts to reshape the North America Technology business into a focused B2B IT products and solutions provider are progressing.  As we execute on our plan we expect to be in a period of significant transition across this business for the next several quarters," said Leeds.

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