Computer seller upgrades to profit
Karen Notebook, one of the largest notebook computer retailers in the country, is now focussing on its sales strategy and continuing to expand its retail outlets as it trundles towards profitability after years of consecutive losses since its inception six years ago.
IT firm Techmex, a Bielsko-Biała-based computer equipment distributor, formally acquired a majority stake of its competitor Karen in the first quarter of 2002, after taking over the company's debts. Karen got stuck in financial quicksand when its former owners overspent by almost €6 million (zł. 25 million), according to Andrzej Kuźniak, a former Techmex salesman who was appointed president of Karen last December, charged with focusing on the firm's sales development strategy. Techmex owns 51.5% of the company, with financial consultancy FinCo Group owning 8% and individuals, banks and investment funds holding the remaining shares.
Though Karen is still cleaning up its finances from past years, the company reached profitability in September 2002, Kuźniak said. Karen plans to release its results for 2002 on Friday.
Karen has come a long way in its financial recovery and still has a way to go. According to the Business Journal's "Book of Lists," the firm racked up a net loss of €671,000 (zł. 2.79 million) on revenue of €18.5 million (zł. 77 million) in 2001 compared to a net loss of €5.1 million (zł. 21.4 million) on revenue of €25.5 million (zł. 106 million) in 2000 and a loss of €2.1 million (zł. 8.88 million) on €20.7 million (zł. 86.3 million) revenue in 1999.
Karen now has some 87 employees, after cutbacks that brought a reduction from around 100 last year. It has been listed on CeTO, a market dedicated to small companies seeking funds to develop their activities, since 1999. The Warsaw Stock Exchange owns 41.5 % of CeTO.
With 23 retail outlets and four franchise operations, Karen plans to open two new stores this year - one in Warsaw and one in Wrocław - to sell notebooks and personal digital assistants of both A brands, such as IBM and Hewlett-Packard, and B brands, such as Toshiba and its own California Access, manufactured at the Idea Nord plant in Suwałki.
The firm targets mainly individual users and owners of small and medium-sized businesses, through outlets in main cities around the country. In recent years, Karen has moved from stores on high streets to shops in malls, where it can keep its outlets open for extended hours and on weekends. By cornering the SME market it has ensured increasing sales of notebooks, since large corporations have reduced the numbers of big tenders they issue for computer equipment. Kuźniak said that in general notebook sales are growing by about 25%-30% a year, depending on the brand.
Karen has a strong market position because Toshiba, whose computers Techmex distributes exclusively here, and California Access comprise about 50% of the market share of all notebook sales, Kuźniak said.
According to IDC Central Europe, there is a strong market trend here for growing sales of notebook computers versus desktops. The IT market research firm forecasts that total shipments of notebooks are expected to increase from 113,400 in 2002 to 139,100 in 2003.
IT firm Techmex, a Bielsko-Biała-based computer equipment distributor, formally acquired a majority stake of its competitor Karen in the first quarter of 2002, after taking over the company's debts. Karen got stuck in financial quicksand when its former owners overspent by almost €6 million (zł. 25 million), according to Andrzej Kuźniak, a former Techmex salesman who was appointed president of Karen last December, charged with focusing on the firm's sales development strategy. Techmex owns 51.5% of the company, with financial consultancy FinCo Group owning 8% and individuals, banks and investment funds holding the remaining shares.
Though Karen is still cleaning up its finances from past years, the company reached profitability in September 2002, Kuźniak said. Karen plans to release its results for 2002 on Friday.
Karen has come a long way in its financial recovery and still has a way to go. According to the Business Journal's "Book of Lists," the firm racked up a net loss of €671,000 (zł. 2.79 million) on revenue of €18.5 million (zł. 77 million) in 2001 compared to a net loss of €5.1 million (zł. 21.4 million) on revenue of €25.5 million (zł. 106 million) in 2000 and a loss of €2.1 million (zł. 8.88 million) on €20.7 million (zł. 86.3 million) revenue in 1999.
Karen now has some 87 employees, after cutbacks that brought a reduction from around 100 last year. It has been listed on CeTO, a market dedicated to small companies seeking funds to develop their activities, since 1999. The Warsaw Stock Exchange owns 41.5 % of CeTO.
With 23 retail outlets and four franchise operations, Karen plans to open two new stores this year - one in Warsaw and one in Wrocław - to sell notebooks and personal digital assistants of both A brands, such as IBM and Hewlett-Packard, and B brands, such as Toshiba and its own California Access, manufactured at the Idea Nord plant in Suwałki.
The firm targets mainly individual users and owners of small and medium-sized businesses, through outlets in main cities around the country. In recent years, Karen has moved from stores on high streets to shops in malls, where it can keep its outlets open for extended hours and on weekends. By cornering the SME market it has ensured increasing sales of notebooks, since large corporations have reduced the numbers of big tenders they issue for computer equipment. Kuźniak said that in general notebook sales are growing by about 25%-30% a year, depending on the brand.
Karen has a strong market position because Toshiba, whose computers Techmex distributes exclusively here, and California Access comprise about 50% of the market share of all notebook sales, Kuźniak said.
According to IDC Central Europe, there is a strong market trend here for growing sales of notebook computers versus desktops. The IT market research firm forecasts that total shipments of notebooks are expected to increase from 113,400 in 2002 to 139,100 in 2003.
