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By | Paul Kunert 5th July 2011 11:26

Northamber to split with vendors again

Surrey distie set to break with Cisco and Toshiba

Cisco and Toshiba are winding down their agreement with Surrey-based distribution veteran Northamber.

The two-year deal with the networking linchpin covered products in its Small Business Technology Group (SBTG) – mini versions of the classic Cisco routing, switching, security and unified comms lines.

Talking to The Register, Cisco UK and Ireland regional sales manager Andy Brocklehurst said its divorce from Northamber was mutually agreed.

"We couldn't get the focus in Northamber to accelerate growth; [sales] remained flat for 18 months. We weren't suited to each other and are going through the process of terminating the contract," he said.

The agreement expires at the end of this month, leaving Cisco with four SBTG distributors including Micro P, Comstor, TD Azlan and Ingram Micro.

Notebook giant Toshiba is also to split with Northamber following a distribution review earlier this year. The relationship is being wound down with the distie selling through remaining inventory and not placing any further orders.

A source close to the situation said Northamber was not driving the requisite sales volumes, but added, "to be honest it is very low margin business".

During the recession, Northamber Chairman David Phillips bemoaned the declining levels of support it received from vendors and in 2009 split with Lexmark, Lenovo and 3Com and then LG early last year.

The firm has however, re-signed with Acer, and worked out deals with SMC Networks and more recently Oki.

However industry onlookers are left pondering how Northamber – the UK's oldest surviving distributor – will carve out a rich future when in the last decade sales more than halved from £299m in fiscal 2001 to just £128m in its 2010 financial year.

The recent interim statement from the firm gave shareholders little reason to cheer, after claiming the fragile economic climate made "any estimate of the future fraught, particularly with the impact of cuts and inflation which have yet to be felt".

One thing weighing on Northamber's side is its debt-free position, with £10m cash still in the bank. In fact investment revenues propped up its bottom lines in recent years and made the difference between turning a profit or a loss.

But in a market that favours the largest international wholesalers or the local specialists, some channel watchers have questioned if national player Northamber has got a trick up its sleeve or if it will continue to run out of steam.

Toshiba refused to comment and despite repeated attempts, Northamber was unavailable to comment. ®

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