Bye Bye compaq.....Compaq To Cut Distributors to Four
.c The Associated Press
HOUSTON (AP) -- Compaq Computer Corp. is expected to announce plans today to slash the number of distributors who sell its products to four from about 40.
A conference call has been scheduled for today, but the company told analysts late Friday, said Ashok Kumar at U.S. Bancorp Piper Jaffray.
''They've talked about consolidation under the old regime for quite some time,'' Kumar said Saturday. ''I think for the first time we're starting to see decisive action.''
The move would be chairman Ben Rosen's first major move since supplanting Eckhard Pfeiffer as chief executive last month. The idea is to allow Compaq to lower costs and better manage inventory and track demand.
Kumar identified Ingram Micro, Tech Data Corp., Merisel and CompuCom Systems as the surviving distributors. The companies already work very closely with the Houston-based computer giant.
''I think very clearly this makes sense in that it gives Compaq more control over logistics,'' Kumar said.
Dow Jones News Wires also identified Inacom as a distributor likely making the cut. Stock prices for all five companies rose sharply Friday.
Compaq did not publicly confirm or deny the report. Shares rose 25 cents to $24.87 1/2 in heavy trading Friday.
Kumar, who expressed confidence last month that Rosen could stimulate Compaq after recent sluggish performance, applauded his transitional management team for the distribution decision.
''It shows they're making difficult decisions and making them decisively,'' Kumar said.
Directors ousted Pfeiffer on April 18, nine days after the company announced first-quarter earnings would fall far short of analysts' expectations. The news plunged Compaq stock by 22 percent April 12.
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