3/15/06

PC Mall goes overseas to cut operating costs

PC Mall, a direct marketer of computer hardware, software, peripherals, electronics and other consumer products, is counting on a new operation in the Philippines to help reduce overhead.

Bill Briggs , Senior Editor

PC Mall Inc., a direct marketer of computer hardware, software, peripherals, electronics, and other consumer products and services, is a leaner and more focused e-retailer these days thanks to the spin off of eCost, a former business unit that now is a subsidiary of PFSweb Inc., and to ongoing moves to lower operating costs.

For instance, in 2005 PC Mall shifted some administrative and marketing duties to a new office overseas. “We opened an office in the Philippines that we believe should provide us an opportunity to reduce administrative and back-office labor costs over time,” says CEO Frank Khulusi. “The Philippines office has enabled us to devote additional resources to enhancing our marketing content on the Internet and other customer acquisition and retention activities.”

The move is paying dividends. PC Mall, No. 29 in the Internet Retailer Top 400 Guide to Retail Web Sites, will break out its web sales later this month in its annual 10K filing. Overall in the fourth quarter the company reduced its consolidated selling and general and administrative expenses as a percentage of net sales to 11.7% from 12.6% of net sales the previous year. For the fourth quarter, PC Mall recorded net sales of $261.6 million compared with $267.1 million in Q4 2004.

PC Mall must reduce expenses to improve its balance sheet. For 2005 PC Mall reported total sales of $997.2 million and a net loss of $3.7 million. In 2005 the company had total sales of $978.3 million on net income of $1 million.

PC Mall operates PCMall.com, MacMall.com, ClubMac.com, PCMallGov.com and OnSale.com. “We are entering 2006 with an even leaner, more efficient business,” Khulusi says. “We will continue to focus our efforts on increasing the productivity of the sales force and reducing our infrastructure costs. We also will continue to ramp-up our offshore operations.”

Topics:

business, business finance, Commerce, Online shopping, PC Mall, Inc.

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