Banque Magnetique - France
On a turnover of £138
million, Banque Magnetique in France achieved pre-tax profits of £1.3
million, representing 13.0% of the total profits of the Niche Distribution
Division (2004 : 12.0%). The overall
return on turnover is 1.0% (2004 : 1.0%), much lower than that achieved by
UMD but acceptable in the short term given the nature of the French
market. Banque Magnetique has
favourable distribution status with its vendors. It is the fifth largest distributor in the French market and it
deals with virtually every one of the major French mass market retail chains
and e-commerce outlets. There is a
tendency for Banque Magnetique to be squeezed between these powerful
customers and its suppliers, with the resulting pressure on margins. The strategic aim is to recruit more
traditional resellers to reduce reliance, over time, on such powerful
partners. The overall French
computer hardware market grew by 5% in value terms in 2005. Banque Magnetique’s growth of 15% is
therefore impressive with the main growth coming from sales of products from
Creative Labs, BenQ and Kodak. Margins were, however,
reduced due to competitive pressure, forcing us to become ever more
efficient. The overall number of
employees has remained constant while sales unit volume has more than
doubled. |
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