Executive Summary
Most of the companies on this list do more than sell computers and computer equipment. Many offer training, system design, support and maintenance, infrastructure reengineering, and a variety of other computer-related services that can be as simple as a software upgrade and as complex as restructuring an entire accounting system.
Partially due to consolidation and economics of scale, smaller companies are finding it difficult to compete with the larger operators. The Internet has become not only a viable but convenient way to purchase computer equipment.
Smaller companies are not the only ones having financial difficulties. Last year’s No. 1 company, MicroAge, reported a drop in reseller revenues for L.A. County from $300 million in 1997 to $166 million in 1998. MicroAge has dropped to No. 2.
Nonetheless, as newer and more advanced hardware arrives on the market, analysts say that companies will continue to look to outside sources to help them install and configure the new technology.
The Pacesetter
Torrance-based Creative Computers is strictly a reseller, providing sales services over the phone and Internet as well as through the mail. Of the six companywide locations, two are in Los Angeles County, employing 550 people. Company revenues from reseller operations in L.A. County reached $540 million for 1998.
Despite steadily increasing sales over the past two years, Creative reported a net loss of $17.8 million ($1.75 a share) last year, compared with net income of $4.1 million (41 cents) a year earlier.
Several factors were cited for the loss. In 1997, the company acquired Elek-Tek Inc., a full-line marketer of computer products, through bankruptcy, and it continued to take goodwill write-offs well into 1998. In addition, it closed most of its Southern California retail operations and bought out leases and paid severance packages. Creative also made substantial investments in uBid, an online auction site.
Creative Computers was founded in 1985 by Frank Khulusi, and began as a single retail operation in Lawndale.
