Systemax is a direct marketer of computers, electronics, and
technology products in North America and Europe (where it operates
under the Misco brand). Through catalogs, websites, and retail
stores, Systemax markets thousands of brand-name and private-label
computer, networking, camera, GPS, cell phone, video game, and
other electronic products. Systemax also sells material-handling
equipment, shelving, storage items, furniture, and other industrial
products. Its customers include businesses, government agencies,
and schools, as well as individual consumers. Systemax was founded
in 1949 as Global Equipment Company.
Systemax consists of two business segments: EMEA Technology
Products Group (EMEA) and Industrial Products Group (IPG).
EMEA (standing for Europe, Middle East, and Africa) is the
larger of the two at 55% of company revenue and sells IT products
under the MISCO and Inmac WStore brands. The two sell a range
of electronic products, from consumer electronics such as laptops,
desktop computers, and tablets to network infrastructure and
printers and toner. Inmac WStore is for the Francophone market.
IPG sells to the US and Canadian markets under the brands
Global Industrial, C&H Distributors, Nexel, Avenue Supply,
Global.ca, Industrialsupplies.com, and PFI. It accounts for the
remaining 45% of revenue. Less electronics focused that its
counterpart, IPG sells material handling, storage and shelving,
workbench and shop desks, packaging and supplies, and other
hardware for HVACs, plumbing, and medical professionals.
New York-headquartered Systemax rings up about 40% of its sales
in the US, about 15% in the UK, and 25% in France. Other markets in
Europe and North America contribute the remainder.
Sales and Marketing
Systemax counts businesses, government agencies, schools, and
individuals among its consumers.
For business customers, Systemax uses a multi-faceted direct
marketing system comprised of its relationship marketers, catalog
mailings, and proprietary internet websites. Systemax markets to
consumers online through website campaigns, banner ads, and email
campaigns. Its e-commerce initiatives and catalog mailings generate
online orders and calls to inbound sales representatives.
Systemax is struggling. The company's sales have declined and
its losses have piled up over the past few years, mostly due to
weakness in Systemax's Technology Products business as selling
prices for computers and televisions have declined. The sale of its
North American B2B unit in 2015 virtually halved revenue.
In fiscal 2016, revenue fell a further 9% to $1.7 billion due to
a 9% fall in EMEA revenue, notably due to poor performance in the
UK the exit of MISCO Germany. The Netherlands and France performed
well. IPG revenue saw net growth of 2% (comprising a 3% gain in the
US and a 10% fall in Canada) amid an increase in demand for
material handling, HVAC, and furniture. Higher headcount also
Net loss narrowed to $32.6 million from $99.8 million the year
before, due mostly to reductions in loss from continuing and
Cash from operating activities swung negative (from $86.5
million to $-57.4 million) due to changes in inventories.
Systemax is letting go of more and more deadweight in an
increasingly desperate attempt to stay afloat. The company has sold
off huge chunks of its business, including its North American B2B
unit and most recently its European MISCO operations, excluding
France. France is one of the few of Systemax's business units
performing well, and will form the core of the European business
Mergers and Acquisitions
In January 2015, to grow its business in the industrial products
market, the company's Industrial Products Group purchased B2B
direct marketer Plant Equipment Group (PEG), which specialized in
maintenance, repair, and operation (MRO) products, from TAKKT
America for $25.9 million cash. The deal expanded the IPG presence
in the maintenance, repair, and operations (MRO) market.
Looking to gain from the ruin of failed US electronics
merchants, Systemax emerged as the winner for the brand,
trademarks, and e-commerce operations of Circuit City in 2009.
Although CircuitCity.com relaunched in mid-2009, Systemax said it
was too early to determine whether retail stores would also make a
Unlike Circuit City, Systemax has been expanding CompUSA's
network of retail stores. (It acquired CompUSA's brand, trademarks,
and e-commerce unit, as well as about 15 retail outlets, for $30
million in 2008.) The company rebranded its more than 10 existing
TigerDirect shops as CompUSAs and added five new locations in 2009.
It added about half a dozen more CompUSA stores in 2010. Systemax
said it purchased the electronics giants in an effort to expand its
e-commerce operations, led by TigerDirect, its online computer
The company exited the retail business in the US in 2015 with
the sale of the operations to PCM.