The 2020 Mid-Year Economic Update_long

Commentary: Sonepar’s Goal with Hagemeyer Deal

As our lead article notes, the big attraction for Sonepar is Hagemeyer's North American industrial business. Sonepar's U.S. customer base is 64 percent electrical contractors and only 14 percent industrial. Hagemeyer's North American operations are 85 industrial and 15 percent contractor. Sonepar would get a well-developed integrated supply business with more diversified products.
&nbsp ;
You have to ask how the model developed for a century or so by Cameron & Barkley and acquired by Hagemeyer at the turn of this century would change& hellip; again -for customers, vendors and employees.
&nbsp ;
Will we see more diversification across channels? Is it possible to buy growth in big chunks and combine different pieces to produce a profitable entity? Recent history seems to ...

As our lead article notes, the big attraction for Sonepar is Hagemeyer’s North American industrial business. Sonepar’s U.S. customer base is 64 percent electrical contractors and only 14 percent industrial. Hagemeyer’s North American operations are 85 industrial and 15 percent contractor. Sonepar would get a well-developed integrated supply business with more diversified products.
&nbsp ;
You have to ask how the model developed for a century or so by Cameron & Barkley and acquired by Hagemeyer at the turn of this century would change& hellip; again -for customers, vendors and employees.
&nbsp ;
Will we see more diversification across channels? Is it possible to buy growth in big chunks and combine different pieces to produce a profitable entity? Recent history seems to favor smaller, incremental steps to expand into tangential product areas.
&nbsp ;
When Hagemeyer combined CamBar, Tristate Electrical and Vallen Safety Supply, it was a tough integration. Hagemeyer was plagued in 2003 by accounting glitches that hurt its reputation with vendors and customers. That was compounded by financial rumors and difficult operating issues in the United Kingdom. The net result in the U.S. was distraction from the continuing integration task at hand since three top distribution companies in their respective product areas were brought together in 1999 and 2000 into an arguably strong growth platform for integrated supply.
&nbsp ;
You can argue that HD Supply may yet reach its potential with a diverse product and customer segment portfolio, but few distributors seem to stay flexible and customer-centric once they get folded into a bigger package. And once you lose that customer connection, you’ve lost the core local value of what defines success for many distributors.

About the Author
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

By subscribing, you are agreeing to MDM’s Privacy Policy.

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.