6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060
Toll free (888) 742-5060
Many distributors express common themes from customers: There's a Catch-22 involving jobs and the state of manufacturing in this country. Until there's some leadership and either positive news on U.S. manufacturing fronts or mitigation strategies, companies will continue to be reluctant to invest ﾖ in plant upgrades, new product development, jobs.
The business press is blowing some crosswinds through this industry this fall as well.
Industrial Distribution Group, Atlanta, GA, struggling the past few years with IT, management and integration issues, as well as shrinking customer bases, got a favorable nod from Wall Street and a nice write-up in the Oct. 6 edition of Barron'sOnline. The stock price, for three years hovering in the $2-3 range, was trading above $6.00 last week. It cites the company's ongoing reduction of debt as well as its migration over to integrated supply as positives. Reason: its integrated supply activities cut expenses for customers, while expanding margins by using customer facilities rather than its own warehouses. There's also the prospect for additional management and consulting fees in these contracts.
That contrasts with a Sept. 11 Wall Street Journal column, Hagemeyer May Get Left Behind, that recounts the tough debt load of EUR900 million it is struggling to manage. The column notes that in 2000 the company planned to invest EUR200 million in a common IT platform and build three to four regional warehouses in the U.S., but three years later has less than 10 percent of the IT upgrade complete, and postponed warehouses beyond the first one.
Another concern expressed: competitors, including Grainger, Rexell and Sonepar, have stronger balance sheets and are better positioned to invest in market-share initiatives. There continues to be considerable talk on the street concerning Hagemeyer's U.S. management changes this year.