Merisel Reveals Plan for Its Return to Profitability - Company Business and Marketing

Edge: Work-Group Computing Report, Feb 7, 2000

Merisel Inc. Friday announced details pertaining to its strategy aimed at returning its North American Distribution business to profitability.

Last month, the company made internal cost reductions of more than 15 percent and completed the combination of its U.S. and Canadian distribution businesses. Now operating as a leaner and truly North American operation, Merisel's North American Distribution business this week implemented modest pricing increases across a broad range of product offerings.

"During the past 12 months, changes in vendor terms and conditions, as well as reductions in volume-rebate opportunities, have had the net effect of increasing the cost of goods purchased by Merisel and other distributors," said Merisel's Ron S. Smith, president, North American Distribution. "These increased costs were the largest single contributor to Merisel's losses in 1999. However, we believe that the combination of internal cost cutting and modest price increases will enable us to achieve sustained profitability.

"We believe our customers will recognize that having a strong player like Merisel contributes to a healthy and competitive marketplace that ultimately benefits their businesses," added Smith. "We will work to strengthen our customer relationships by displaying a superior understanding of their business needs and an unmatched ability to help them grow their businesses more profitably."

Merisel is a leading full-line distributor of technology products to resellers throughout North America. The Fortune 500 company supports the growth of its partners with extensive business-development and educational services, expert technical support, flexible financing options, certified configuration services and progressive e-business solutions. Merisel also offers dedicated support to enterprise resellers through the Merisel Open Computing Alliance (MOCA). For the 12 months ended Dec. 31, 1999, the El Segundo-based company expects to generate sales of $5.2 billion. Visit Merisel at www.merisel.com.