Data Select: Nokia loss was a positive

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Takeover talks, management buyouts and contract terminations – just some of the headlines Data Select was linked to in 2011. Michael Garwood visits the distributor’s Slough offices to find out the inside story

Six months ago, the future of Slough-based handset distributor Data Select was in the balance.

The company has been at the centre of countless takeover rumours for years, with Peter Jones, chairman and CEO of Data Select parent company Phones International Group, reportedly keen to exit the market.

These rumours intensified last April when, according to anxious sources at  Data Select, officials from rivals Brightstar Europe visited the firm’s offices to finalise a deal.

The same sources even claimed that decisions had been made as to which staff would stay and which would leave as part of the takeover.

The deal eventually fell through, but Jones made his intentions clearer when he sold M2M business Wireless Logic for £38 million in August.

This move completed a hat-trick of mobile-related sales in the previous 12 months, Jones having sold off SIM business Data Select Network Solutions and digital marketing company PJ Media for £49 million.

He then told a national newspaper he was looking to create a war chest by offloading Data Select.

Officials at the company have remained tight-lipped on the matter, and sitting in front of its recently promoted managing director, Roy Taylor (pictured right), and marketing director, Jason Kemp (pictured left), nothing has changed.

While Taylor, who himself is heavily linked with a management buyout of Data Select, side-stepped such questions, he admitted speculation took its toll internally, reducing morale and prompting a number of members of staff to leave.

“There is no denying the media speculation surrounding the business drove a wave of uncertainty and we had a number of nervous individuals in the business,” he says. “Some of those chose to leave as a result.”

But today he insists the company has moved on. All talk of acquisitions has moved from being the subject of an acquisition to being the acquirer, and morale is said to be at an all-time high among the firm’s 120 plus members of staff – of which 11 have now received promotions.

Alleged restraints on recruitment also appear to have been lifted: an additional six members of staff have joined in the past two months and more are likely to follow.

“The atmosphere here now couldn’t be more different,” says Taylor. “We are proactively recruiting and promoting staff within the business, which is good for morale. The whole management team is focused on taking the business forward.”

Restructure

Taylor officially began his new role at the back end of last year, and he has spearheaded a company restructure designed to help form better relationships and understanding with its customers.

He explains the changes have led to the firm’s four key business areas – B2B, retail, online and fulfilment – being managed individually by “specialist” staff members.

Taylor says he wants staff to be able to focus on specific markets and customers rather than be jacks of all trades.

The impact, he claims, has been instant, with Q4 sales increasing 20 per cent year on year.

Kemp explains: “Our four main key areas have seen huge growth since the restructure. We decided to have one retail specialist, one online specialist, one B2B specialist and one fulfilment specialist. We’ve installed people to head up those channels. So rather than focus on multiple things, they focus on one.

“Our top 10 online accounts are now managed by one account manager. They will understand that market and what those customers want and need better than if they were spread across five to 10 others.”

In addition, Kemp now has a team of four people on the road actively seeking “long-term” business opportunities with new and existing customers.

Kemp reveals: “The team go out and arrange meetings to discuss long-term needs and their strategies rather than simply asking them what stock they want and how much they want to pay for it.

“They arrange meetings with relevant managers and vendor partners to help to formulate marketing strategies and build closer ties.”

Life after Nokia

In addition to the recent restructure, surprisingly Taylor and Kemp include the loss of Data Select’s agreement with Nokia as one of the reasons for the upturn in sales.

Many in the industry had suggested Nokia’s decision to end its 20-year affiliation with Data Select could be detrimental. Some quoted figures suggesting Nokia accounted for 50 per cent of the company’s business, a void they said it would beunable to fill.

Taylor, who will not be drawn on specific figures, admits it was a “massive account”, but in the same breath he says that while volumes may have been high, profitability was often limited.

He also insists Data Select’s remaining partners, which include Sony, LG, Motorola, Samsung, Acer and Huawei, have more than filled the void left by the Finnish manufacturer.

Full article in Mobile News issue 508 (February 27, 2012).

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