Escom (2) - no takers but UK retail still has rich pickings

A high level of I-told-you-so was apparent in the UK PC industry as pundits chewed over the bones of the Escom collapse today, seeking reasons for the stunning collapse. The consensus of wisdom: a kamikaze raid on market share.
Written by Martin Veitch, Contributor

"When Escom arrived most people agreed they couldn't sustain selling at cost or less than cost," said John Ces, a senior analyst at Romtec market research. "The prices were undercutting everybody else on the market. They had the right idea going into retail, which was the growth channel, but if you're massively undercutting your biggest rivals like Dixons and Byte and not making profit, then it seems pointless."

However, while Escom's exit is obviously great news for Dixons (who recently announced impressive results for its PC business) and Byte, nobody thinks that the German company's demise erects a 'keep off' sign for potential newcomers.

"There's still growth in [UK] retail," said Romtec's Ces. "Without Escom what would the sales of Dixons and Byte have been like? No question, the existing players in the channel will benefit but I'm sure there are some direct sales PC firms who will be interested in the retail premises that are left." The prime candidates being whispered by the rumour mongers included Time Computers, Amstrad, Gateway 2000 (which recently opened a central London showroom) and Dell.

While, off the record, no crocodile tears were being shed for Escom, former rivals weren't queueing up to criticise the firm. Vobis declined to comment while Dixons, Amstrad, Viglen and Gateway 2000 and Granville Technology didn't return calls.

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