Shareholders Charged Up Over Electronics Retailer

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As the recovery builds momentum, more businesses are updating their technology. And that means sales are booting up for the Torrance electronics retailer PC Mall Inc.

As a result, PC Mall was the LABJ Stock Index’s top gainer last week with a share price increase of 18 percent. (See page 20.) The stock closed at $9.20 on Feb. 23, up from $7.77 a week earlier.

Chris Krueger, an analyst who covers PC Mall for Northland Securities in Minneapolis, said the computer seller is benefiting from the recovery.

“Companies were at a lull for a couple of years when the recession was tough, but now the time has come to start refreshing and replacing things again,” he said. “It’s finally starting to show up in PC Mall’s stock.”

PC Mall on Feb. 15 reported net income of $7.6 million last year, up from $3.4 million in 2009. Revenue was $1.4 billion, up 20 percent from the previous year.

Brandon LaVerne, PC Mall’s chief financial officer, attributed the growth to an increase in sales in its small- and medium-size business segment.

“There was a return to normal seasonal buying patterns,” he said.

The company also sells to big businesses, or those with more than 1,000 employees, and directly to consumers.

In fact, PC Mall’s consumer business, OnSale.com, which currently is only a small slice of its revenue, is set to expand.

PC Mall recently announced it repurchased ECost.com, an online store that sells electronics and other items such as apparel and sports gear, for $2.3 million.

“We’re looking at ways to leverage that business and reach a vast consumer market in a profitable way,” LaVerne said.

ECost was originally a subsidiary of PC Mall, then went public in 2004. A year later, it was bought by PFSweb Inc. of Plano, Texas. PFSweb sold it back to PC Mall, which plans to combine operations of ECost with OnSale.

“It was a pretty low price for those assets,” said Krueger, who currently has an “outperform” rating for PC Mall. “They reacquired the business, so they should have a thorough understanding of what they’re buying.”

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