complistory/mike1st/mark2nd
BEN SULLIVAN Staff Reporter
For Los Angeles computer retailers, 1996 proved there’s more than one way to make money.
The top two companies, as determined by computer-related revenues of L.A. County stores, have fundamentally different approaches to sales.
Florida-based Office Depot, with 32 outlets in L.A. County, generated $200 million in computer-related revenues the old fashioned way: having uniformed clerks sell hardware and software to walk-in and special-order customers.
With a different approach entirely, and generating $118 million in 1996 sales, was NovaQuest InfoSystems, based in Torrance. Beyond having just a single L.A. location, NovaQuest differs from traditional retailers by functioning as a “reseller.” Instead of having shops where customers come in to buy machines, NovaQuest works with businesses to supply entire information systems. No customers actually come to NovaQuest’s office.
“We buy and install computers,” said NovaQuest CEO Asif Hudani. Customers include the City and County of Los Angeles, the Department of Water and Power and Lockheed Martin Corp.
Between companies upgrading their information systems, and integrating their machines with the Internet and intranets, “we couldn’t keep up with demand,” Hudani said.
Individual consumers’ demand for computers and related accessories also seems strong.
Fully 7 percent of Office Depot’s national computer sales in 1996 came from its local stores.
Office Depot officials said an L.A. computer sales figure for 1995 was unavailable, meaning that no growth rate could be computed for its $200 million sales figure for 1996.
Nationally, Office Depot’s computer sales rose 17 percent last year. That’s in line with a local and national trend in which office and electronics superstores are assuming an ever greater bite of the retail computer industry.
Best Buy and Circuit City, two of the largest electronics superstore chains, each saw national computer sales rise by 19 percent last year, according to a study by Computer Retail Week magazine. Total nationwide retail computer sales rose 20 percent last year, according to the magazine.
Page Computer of Los Angeles, ranked No. 5 on the List, isn’t a national chain, but it’s riding the swelling demand. Like NovaQuest, Page specializes in installing hardware and software for corporate clients.
“The products are available cheaper now (for the customers) than last year, so our profits per sale were lower,” said Page Vice President Charlie Davis. “But we sold more machines because of the price drop, so overall we did OK.”
Page saw stagnant revenues of $58 million last year, an amount identical to that of CorpInfo Services/MicroAge. However, CorpInfo’s revenue reflected a jump from $50 million in 1995.
Technologically, 1996 was an in-between year for the computer retail industry: The initial luster of Windows 95 had worn off, but Windows NT 4.0 had not yet really caught on. Intel’s Pentium chip was no longer a new kid on the block, but the more powerful Pentium Pro was not yet standard.
Amid its corporate floundering, Apple Computer Co. had few new offerings, and a much-ballyhooed Pentium MMX chip for multimedia processing (introduced in 1997) hadn’t arrived yet.
Local competition pushed some players out of the market entirely: L.A. Tronics, closed its five stores last spring, Adray’s of Los Angeles shut its nine L.A. County shops in the fall, and Tandy Corp. announced in December that it would shut seven of its Southern California Computer City shops.
Today, with the “in-between” year behind them, plenty of technological innovations hitting the shelves, and weaker competitors extinct, the remaining L.A.-area computer retailers are poised for continued growth.
“A lot of people are going to want to upgrade” to new chips and operating systems in 1997, said Davis of Page Computer. “We think it’s going to be a better year for us. Whenever there’s a change or something new, our sales always go up.”
