Spicers has announced a collaborative alliance with the UK’s largest IT and EOS distributor Westcoast. The UK and Ireland OP wholesaler said the alliance will see the parties offer an extended range of products and services to support a single-source solution.
This collaboration will use the Spicers RDC network allowing Westcoast products to be delivered by Spicers in the same delivery as its office products. Products will include Westcoast’s full portfolio of EOS inks and toners as well as hardware, software and accessories.
“Westcoast is undoubtedly the expert when it comes to IT range and scale,” said Spicers’ CEO Alan Ball. “The market pressures on fulfilling a wide range of products and services are growing and this collaboration provides a simple solution that is unrivalled in the sector. We are excited about the additional future business opportunities that have been identified.”
In a follow-up with OPI, Ball said it was “ludicrous” to suggest that Spicers was “holding the white flag up” in terms of EOS.
Taking cost out
“EOS still represents a significant part of our business,” he noted. “What we are doing is increasing our range and extending the offering, but with a partner who has specific expertise in this area. What we are both doing is taking unnecessary cost out of the supply chain and offering all our dealers a better deal. What you [need] to understand is that very few dealers have anything other than a buy-sell demand for the product.”
Ball confirmed that orders are placed on Spicers’ ordering platform, and Spicers picks, packs and despatches the product and then invoices it. The extended range is open to all its resellers and Ball said this would help local dealers who may not have previously had access to this range from Spicers.
As to the question of further collaboration with Westcoast, Ball said that “more will follow”, but it is not clear how this could impact Westcoast’s own OP offering which it is in the process of setting up.
“I am sure Spicers will help us,” Westcoast’s Sales and Marketing Director Alex Tatham told OPI, without going into specifics, although he confirmed that Westcoast’s own office products strategy is unaltered.
Courtship?
Proof of a closer relationship between Westcoast and Spicers has given rise to speculation that the IT distributor could be in the frame to acquire Spicers when it eventually comes on the market. Better Capital acquired the wholesaler for £32 million ($48 million) at the start of 2012 and consensus opinion is that it will look to cash in after about three years. That’s only 18 months down the line, so are we seeing the start of an extended courtship period?
It’s possible, but Westcoast isn’t the only UK IT distributor that is currently showing an interest in office products.
London-based Beta confirmed its entry into the office products market at the end of April. Around 200 generic core lines along with 150 branded products are being stocked and are available for delivery next day either to a dealer’s premises or as a plain label shipment direct to the end-user.
Whether Beta’s product range is wide enough to tempt office dealers to switch remains to be seen, although it may appeal to EOS dealers that don’t currently offer office supplies. There are also some initial questions over the lack of an OP catalogue and Beta’s ability to provide acceptable service levels outside London. Answers to these will surely be provided in the coming months.
A Gem of an offer
Although it hasn’t been officially announced, another distributor is also putting together an office products offering, according to several UK industry sources. Gem Distribution already has an ex-Spicers’ Purchasing Director in its ranks in the form of Anthony Haworth, and OPI understands that Colin Learmouth has recently left his purchasing role with the wholesaler to lead the OP purchasing effort at Gem in a project that also involves former Spicers and VOW furniture executive David Orr.
Gem’s OP offering apparently involves up to 7,000 SKUs and does include a dedicated catalogue. Again, we will have to wait and see until the initiative has been formally rolled out to judge whether it is a serious competitor to the established wholesalers, but Gem is part of the €13 billion ($17 billion) Ireland-based DCC group and has recently invested in an impressive new logistics facility in Northamptonshire. If it does things properly, there’s no reason it can’t make some waves.
