Redundancies as Renaissance stirs Apple division
- 20 February, 2007 22:00
Renaissance says further redundancies, in addition to that of Apple Division head Steve Ford, will result from the restructuring of the division. The restructuring follows a reduction in the margin available to the distributor when Apple introduced its online store in New Zealand and lowered prices for end users.
Renaissance managing director Paul Johnston says his company is talking to those whose positions will be affected, so can't give details about the roles.
“Restructuring the division will result in some positions being redundant but the bulk of the division will remain in place,” he says.
Johnston says he can’t understand why there is so much focus on speculation that Renaissance will lose the Apple agency, adding that the distributor has aggressive growth targets.
Apple public relations manager Fiona Martin says speculation that the vendor will establish a local division is “definitely a rumour”.
She says Apple is ramping up the level of local marketing after the opening of the local online store.
She also says there are no plans to open a branded retail store like the one it plans to open in Australia.
Although Renaissance announced a record profit for the year to 31 December 2006 – with a 5% increase in sales on 2005 and an after tax surplus of $6.2 million, up from $5.1 million in 2005 - Johnston expects 2007’s profit will be lower than 2006’s.
He says in one eight day period, more than one vendor changed the margin structure of some of the products Renaissance carries.
“When that all happens in the space of eight days you need to take action. We think there’s still going to be healthy growth in sales but the available margin is reduced so we think 2007 will be behind on 2006.”
However, Johnston says Renaissance had an extremely good year as it outperformed a lot of other IT companies and should be proud of its result.
“We gave notice to the market at the beginning of 2006 that we thought we could reach 20% growth in net profit and we came in pretty much spot on.”
He says Renaissance Brands had a very good year. “In 2005 we had 2-3 really large one off deals. In 2006 we brought on some new brands after the loss of Macromedia when it was bought by Adobe, but we didn’t score any big deals in 2006 and still saw growth in the business. That’s an extremely solid foundation.”
Its Insite PC build business was 40% up by unit sales in 2006, but there were costs involved in the acquisition of Ultra Computers, Johnston says.