Distributor 20:20 Mobile gathered 50 of its closest customers together last week at Mercedes Benz World to announce its second coming, its late renewal as a benevolent and inclusive dealer champion.
This event was hugely important in 20:20’s recent convoluted history, coming almost a year after its parent, venture capitalist firm Doughty Hanson, handed 45 per cent equity in the business back to the banks that financed its £347 million purchase in late 2006.
That refinancing saw more than 60 per cent wiped off the original value of the business, and showed how differently the old and new markets saw its worth.
There has been huge internal change at 20:20 in the intervening period – a management restructure, redundancies, the sale of its airtime division, and the absorption of its remaining distribution and logistics units under a new group brand. 20:20 claimed here that a different business has emerged.
And except for the tyre-burning of 6.3 litre Mercedes AMGs, the tone at Weybridge was unlike previous 20:20 dealer events, removed from the kind of lavish self-regard that has characterised much of the mobile distribution channel for two decades.
This was less a rowdy celebration of 20:20’s total market dominance, and more a considered appeal to its allies that the market is tough and that their fates are intertwined. There was tacit acceptance here that 20:20’s old ways are no good in this new market dynamic, and that it has re-set itself accordingly.
UK managing director James Browning (pictured) has talked for more than a year of 20:20’s need to change the market’s perception of it. Internally, it claims now to be focussed on collaborative partnerships with suppliers and customers, rather than buying market share by strong-arming vendors and undercutting the competition as it did under former owner John Caudwell.
“We have gone through that process and have come out a much stronger and healthier business. Partnership is key, and we will be the best for our suppliers and our customers.
“Gone are the days when the prerequisite for a distributor was simply to have stock at the right price. It’s not like that. The market is very challenging, everyone has stock, everyone has price; we recognise we need to do more than that.”
Sales director Steve Sanghera went further: “You cannot be complacent in this market. Other distributors were making ground on us. It hurts to say it, but maybe they had better offers than us. 20:20 has lived off its reputation for so many years – we are the largest, that’s why you buy from us.
“We won’t do that anymore. There is none of that in our business now. The market place is very competitive, and customers expect more for less. We are raising the bar again, and will continue to do so.
“Because it’s going to get tougher for the independent channel. There are 1,000 dealers out there now. There might only be 600 in a year’s time. Business will come from a smaller number, and we want to help those dealers grow with us.”
At Weybridge, Browning referred to 20:20 as effectively a “relatively new” UK distribution business, in terms of its ethos at least.
Even so, 20:20 still likes its legacy as king of UK handset distribution, and disputes the notion its crown has slipped completely. Browning issued headline statistics to discourage the idea: the UK contributed £350 million to the group coffers, well over a third of its £850 million turnover; the total international business dispatched more than 12 million units, and completed over 20 million transactions.
“We are in the top three or four distributors in the world,” he said.
Full article in Mobile News issue 442 (June 29, 2009).
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